Google is making it easier for travel shoppers to find and use its flight or hotel search through some design changes rolling out in the coming weeks. Watch out, Kayak and Skyscanner. Airlines and hotels will have to pay attention, too.
Google is putting it all together: In the coming weeks, Google will knit together some of its travel services via design changes.
The Alphabet Inc.-owned company’s search-advertising business continues to drive a majority of its revenues a couple of decades after its founding. But developing its own travel products, which are still advertising-driven, is adding a twist.
On Tuesday Google announced a gradual rollout of new user experience changes to its travel tools.
Since its travel push began in earnest in 2011, a shopper who has done a flight search and who has then wanted to do a hotel search for the same dates has had to re-enter the itinerary details.
Now Google is adding a navigation bar across the top of the search features. After a flight search is done, a shopper will be able to tap “hotels” and see the same dates and destination already entered for a lodging search.
One of Skift’s travel megatrends of 2018 was that Google’s product-led vision is bearing fruit. By “product-led vision”, we mean engineers solving specific problems for particular types of users rather than executives in a suite creating a grand strategy.
A case in point: For mobile users, getting speedy results is a key issue. Google engineers have ensured that its flight search fetches answers faster than leading price-comparison companies Kayak, owned by Priceline Group, and Skyscanner, owned by Ctrip.
Changes to the User Experience
In that spirit, Google is rolling out changes to its travel tools that may seem like minor design tweaks but that cumulatively indicate its direction and momentum. The changes will come first to mobile web in the U.S. and spread across other platforms and geography.
The changes will almost certainly expose more Google users to the company’s travel tools. A user will be able to type in “visit new york” and see the full set of Google travel tools as a suggested option for further research. In the past, they had to type “flights to New York” or “hotels in New York” to get to each module in Google’s toolset.
Google’s moves to encourage flights shoppers to also book hotels through its platform may be out of a position of weakness, as third-party estimates suggest it receives far more traffic for flight search than hotel search — while flights may generate minimal margins for the company.
In short, getting more shoppers to also book hotels will give Google a big boost.
Having said that, the hotels featured in the revamped hotel search do not need to buy ads with Google via its Hotel Ads program. Hotel information, photos, and reviews come from business owners, Google users, and content partners, and hotel owners that have claimed their listing on Google My Business can confirm their business information without paying.
Game of Catch Up
Some of Google’s recent changes appear to be an attempt to mimic best practices pioneered through testing by other players.
Some of the tweaks to how users can select dates for trips via mobile devices, for example, are similar to moves pioneered by Kayak, Skyscanner, and Hopper.
For many months, Kayak and Skyscanner have gradually made it easier to filter out so-called basic economy fares, which often come with strict travel restrictions such as limited carry-on baggage allowances, from full-featured tickets. Google is only now adding similar search filtering for its flight search tool.
In recent weeks, it has added some enhanced price-prediction tools pioneered by others, too.
Google also isn’t innovating as much as it could, such as by letting a shopper compare flights across airlines with all of the extra services, such as additional legroom and checked bag fees, that he or she may want.
From the perspective of North America, Western Europe, and China, it is easy for casual observers to assume that price comparison websites that refer users to suppliers and online travel agencies to book directly — so-called metasearch — has been dominated by just a couple of players, namely Priceline Group’s Kayak and Ctrip’s Skyscanner.
But that’s not true. In much of the world outside of the U.S., Europe, and China, there is typically no established player. In Mexico and Brazil, Google Flights is the leader in traffic and, according to anecdotal conversations with distribution executives at a handful of airlines in those regions, revenue generation.
Revenue from Google Flights is still small, sources say. Referrals remain in the low single-digit percentages of total revenue for a couple of significant Latin American carriers. But traffic growth doubled in the past year from a strong start.
Last year, Google launched flight search in Mexico, Australia, and New Zealand. Some of Google’s gains in emerging markets in those markets may be due to it, having displaced on screen space other booking options.
Google is eager to point out that it also provides consumers with information that may help persuade them to book with an airline directly.
In the U.S., metasearch competition is more established. For the handful of major domestic airlines, about one out of every five searches that go directly to airline websites are estimated to come via referrals from price-comparison sites, with Kayak in the lead.
These referrals may account for nearly 10 percent of U.S. carrier total sales, on average, according to estimates by investment analysts covering those airlines. About half of total airline leisure sales are now direct to their sites, on average, according to statements by airline executives.
In the U.S., Google Flights may be set to overtake Kayak in the next two years if it maintains its rate of growth, according to one North American airline executive speaking anonymously and making inferences based on the pace of referral volume.
While the online travel groups, who are major advertisers, may be displeased, the airline suppliers are large companies with advertising budgets, too. The airlines will be pleased by the growing referrals because direct referrals spare them from paying high fees, particularly on international itineraries, to technology middlemen Sabre, Amadeus, and Travelport — which, in turn, power the results of online travel agencies like Expedia and offline ones like Flight Centre and Liberty Travel.
But Google’s apparent strategy to slowly grow its price-comparison search through product enhancements brings some headaches.
Airlines are trying to require that Google provide exclusivity in their direct contract agreements, to prevent Google from displaying fares from both the major airline’s direct website and a third party supplier for the same flight, according to sources.
On a Google mobile web search on Tuesday for flights between Chicago and Dallas, United flights that were available for booking directly with the united.com site weren’t listed with alternative ways to book the same flights. Similar results held true for a few other giant airlines in the U.S., but patterns are not consistent across searches.
In contrast, on a Kayak mobile app search, for example, the same flights were consistently available via travel agency partners.
Putting delicate negotiations aside, Google has said that price comparison increases the number of people actually transacting. Google collects more money per transaction through these referrals than via its traditional paid “blue link” advertisements. So Google will be tempted to push this trend as far as it can go as noted a couple of months in Skift Research’s Deep Dive Into Google Travel.
One area that Google is leaping ahead of competitors is in its trip-recommendation tools for search and for its Google Trips app.
Its previous algorithms suffered from the problems of offering itineraries that were often unbalanced with days visiting top attractions followed by days of lower-quality alternatives and with trips often re-visiting neighborhoods repeatedly in order to cover increasingly low-tier points of interest.
The company has introduced a smarter algorithm that maximizes quality that it said has been confirmed by independent studies.
In Skift’s tests, the itinerary recommendations are better than anything we’ve seen from dozens of smaller companies and startups over the years and from any online travel rival. Again, the product-led approach is bearing fruit.
For now, Google recommends just a few itinerary suggestions that are free. But over time, they may become a money-making source for ticketing for attractions and activities. Already on its Trips mobile app, it offers some such options.
The itineraries are served across the Trips app and Google’s other search channels. In Google web search, for example, a new “Explore” button in the navigation bar will show users Google’s imagery and suggested itineraries for locations, too.
A couple more design tweaks: Logged-in Google users will be able to see itineraries for upcoming trips pulled from their Gmail accounts under a label for their upcoming trips in the new navigation tab at the top of travel search box.
The company has been experimenting with putting the name “Google Travel” at the top of the search box. But it has also been trialing the name of the destination, such as “Boston,” as the best text to put up top, said Eric Zimmerman, director of travel product management.
Overall, Google is taking quiet steps to gain share. For more, see Skift Travel Megatrends 2018: Travel Megatrends 2018: Google’s Product-Led Vision Is Bearing Fruit
Photo credit: Google Flights is slowly adding a tab at the top of its mobile web search interface so that shoppers can click right into hotel search to check rates and availability in their destination cities for the dates they had already selected. Sean O'Neill / Skift