Skift Take

As travel demand picks up helter skelter, depending on the destination and trip mode, travel advertising has returned as a strong piece of Google's business. Among the companies that have emerged from the pandemic with momentum, you can place Google in the upper echelon.

Reflecting ongoing traveler confusion over ever-changing Covid restrictions and destination entry requirements, Google saw searches about travel rules jump sixfold year over year from August to October.

That was one of the biggest search trends that Google saw in travel, as parent company Alphabet reported its fourth quarter and full-year results Tuesday.

Google saw its advertising revenue jump 32.5 percent to $61.2 billion during the the quarter, which ended December 31, with retail being the strongest category, and finance, media and entertainment, and travel strong contributors.

“Look, I said earlier that travel was a contributor to our year-on-year ads growth in Q4, and we were encouraged by the performance we saw throughout much of the quarter, but we found that user behavior tends to reflect what’s going on in the world,” Philipp Schindler, Alphabet’s chief business officer, told analysts.

Travel demand has varied by destination and activity type, especially during the Omicron wave, he said.

“We’ve seen changes in traveler search behavior as preferences have evolved such as searches for outdoor destinations like beaches, parks and camping have increased, while searches from museums, for example, have declined,” Schindler said.

He said it is still too early to determine “what trends are here to stay and which pre-pandemic habits are coming back.”

Schindler said Google altered its travel product strategy during the pandemic to emphasize helping travel partners identify demand and offering other travel insights, as well as expanding beyond advertising into providing free links for hotels, tours and activity providers, and other travel companies.

As regulators around the world bear down on Google and other platforms, it doesn’t hurt to show that the company is making overtures toward leveling the playing field somewhat for travel companies that that don’t have the massive resources to compete in advertising against the likes of Expedia Group, Booking Holdings, Tripadvisor and GetYourGuide, for example.

Among the new tools, in December 2020 Google announced the pilot of destinations and hotel insights tools in Asia Pacific, and the launch of a couple of travel insights tools in the U.S. in July 2021.

While many destinations are still suffering because of the pandemic’s wrath, Alphabet is performing well. Its net income rose 35.5 percent to $20.6 billion in the fourth quarter on revenue of $75.3 billion, a 32 percent jump. Advertising revenue makes up the vast majority of Google’s sales, and it rose 32.5 percent to $61.2 billion in the fourth quarter.

Alphabet’s net income for full-year 2021 was $76 billion, an 89 percent leap.

Early in the pandemic, several travel companies lashed out at Google for what they perceived as its lack of aid to a struggling travel industry, a charge that Google rejected.

In other news that one day could be relevant to how travel transactions get done, Alphabet CEO Sundar Pichai said during the earnings that Alphabet’s “Cloud team is looking at how they can support our customers’ needs in building, transacting, storing value and deploying new products on blockchain-based platform. So we’ll definitely be watching the space closely and supporting it where we can.”

Several travel companies are testing transaction through blockchains, which purport to give suppliers more control and reduce the power of go-betweens such as global distribution systems. American Airlines, for example, is testing processing some EY corporate travel transactions through a Winding Tree blockchain.

Google would undoubtably get into the blockchain business if it shows promise.

Alphabet also announced a 20-for-one stock split. Based on Tuesday’s closing price of $2713.97 per share, that would bring Alphabet’s share price down to a more affordable $135 or so.

Update: This post has been updated to reflect the stock split.


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Tags: advertising, alphabet, blockchain, earnings, google, lockdowns, travel restrictions

Photo credit: A tour boat in the Netherlands as seen in 2015. The Netherlands currently has a travel ban for travelers outside the European Union/Schengen area. Mike Bonitz /

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