Google announced it will shut Book on Google for flights for users outside the U.S. at the end of September, and told Skift it will likewise end the feature in the U.S. sometime after March 31.
It turns out, a declining number of users were booking their flights on Google, which acknowledged that travelers would rather book their flights with online travel agencies or directly with airlines.
To be clear, Google Flights is not shutting down, but will continue to enable travelers to click on airline and online travel agency links to book their flights, as they have done for years for the vast majority of flights. What changes is that Google will no longer take a small share of bookings on Google channels, but will refer all users to partners for bookings.
Eliminating the feature likewise doesn’t hurt Google’s case to beat back regulatory efforts to diminish its power on antitrust grounds.
With the Book on Google feature for flights, travelers can book on Google, but Google was just facilitating the booking for that airline or online travel agency, and the latter provided the customer service function. Google wasn’t charging airlines for the feature.
“Over the next 12 months, we plan to phase out the Book on Google feature for Flights,” Google stated. “We originally offered this functionality to give people a simpler way to buy their tickets and to help our partner airlines and OTAs receive more bookings. However, we’ve found over time that people actually want to book directly on partner websites, and we always strive to meet user preferences whenever possible.”
Some pundits saw Book on Google as the company creeping toward becoming an online travel agency, but that never appeared to be the intent. Google makes too much money on travel advertising to want to directly compete with its biggest partners. Google also has no interest in dealing with flight changes and cancellations, or in providing customer service to stranded travelers.
Google launched Book on Google in 2015 as a way to facilitate bookings for airlines and online travel agencies in an era when many of their mobile websites weren’t particularly sophisticated.
But partners’ mobile capabilities have improved in the interim, and Google said it saw a declining share of flight bookings coming from the Book on Google feature.
Many metasearch sites over the years have tried these types of facilitated bookings for partner airlines and hotels, but with a few exceptions, such as HomeToGo in Germany, this type of feature has been waning for years.
Ted Clements, FareHarbor’s acting CEO who served as chief operating officer for the last three years, will step down from these positions in September, Skift has learned.
Staff was informed of the move Tuesday, and no replacement has been named. Clements plans to stay in Amsterdam, headquarters for sister company Booking.com, and may pursue new opportunities, according to the announcement.
Rob Ransom, senior vice president, global strategy and business development for Booking Holdings, made the internal announcement, and said he would play a more active role in FareHarbor.
FareHarbor more than doubled its revenue during the years Clements served as chief operating officer, according to the announcement.
Tours and activities are key to Booking Holdings’ connected trip strategy, which aims to provide a hassle-free travel experience throughout the journey.
FareHarbor co-founders Lawrence Hester and brother Zachary Hester left Booking Holdings in July 2021. Max Valverde, who served as FareHarbor CEO from 2019 to 2021, likewise left Booking at that time.
FareHarbor’s strategy has evolved over the last few years, evolving from an exclusively build-your-own strategy model in the early days under Booking Holdings to include FareHarbor outsourcing some of that work to partners such as TUI’s Musement and Viator in recent years.
The changing of the guard at FareHarbor comes as Google is getting more aggressive in building its own “things to do” business with an emphasis on big attractions. Booking engines such as FareHarbor and Peek participate in Google’s offering.
“Google will kill Airbnb,” tweeted Nick Huber, who writes about business and real estate, owns a self-storage company, and has 247,000 followers on Twitter.
Two people independently messaged me about the tweet, which has generated a few thousand “likes,” and hundreds of retweets since Sunday.
One Skift colleague said of the tweet: “Everything this guy says in his tweet thread is wrong.”
Conversely, a superhost in Europe messaged me about Huber’s tweet: “I would have to agree. Everybody loves a direct booking (both hosts and guests), with no whopping service charges.”
Hosts Just Need to Put Links to Properties in Google … Hmmm
If only it were that simple.
Huber argues that hosts and guests can avoid Airbnb’s substantial fees, and both can save money with direct bookings. Actually, he claimed that Airbnb takes 25 percent of the transaction, mostly from guests, in the form of fees, which seems excessively off the mark.
After this story posted, travel industry veteran Drew Patterson tweeted that Airbnb revenue was only 13 percent of gross bookings in 2021.
One of the silliest things Huber tweets is, “All it takes is folks putting a little link to their software in the Google listing. Management co manages that directly. Way more revenue to owner and less cost to guests.”
Alas, graveyards full of startup companies from Palo Alto to Madrid and Mexico City are testimony to the fact that you can’t merely put a link on a Google business listing, and expect millions upon millions of customers to discover it, and then use it. It takes a mammoth amount of resources to attract direct bookings and for a vacation rental business to build their own brands.
Hey, direct bookings would be mostly great for hosts and, to a lesser extent, guests, but how can property owners and managers attract them?
If you look at the global hotel industry, it has done an admirable job over the last few years, spending huge sums in advertising to urge customers to book directly on their own websites, where they have the lowest rates, instead of using online travel agencies.
Hotel direct bookings haven’t killed Expedia or Booking.com. Travel, it is often said, isn’t a zero-sum game. There is ample room for multiple winners.
Property owners use Airbnb for a reason: Airbnb has a great brand, and attracts legions of guests who start searching for places to stay on Airbnb instead of beginning their trip-planning on Google.
How does the host with one or a handful of properties compete with that kind of market power?
Direct Bookings Have Risks, Too
And although guests can avoid Airbnb’s fees by booking direct with the host, they run the risk of having no one to turn to if the host or property turn out to be a nightmare. Whether or not they work as well as advertised, Airbnb has some insurance protections in place for both hosts and guests.
Airbnb critics will be quick to say that Airbnb’s customer service for guests can be challenging, but it’s often better than dealing with hosts who have no brand or track record to stand behind them.
In fact, Google’s travel vertical has a vacation rentals feature, and it hasn’t really distinguished itself or put much of a dent in Airbnb’s growth precisely because Airbnb, and other big vacation rental brands, have shunned offering their homes and apartments through Google vacation rentals. So Google is hardly usurping Airbnb on that front.
Google has certainly damaged the businesses of innumerable travel companies because of its near-monopoly in search and the way it preferences its own travel advertising features. Curiously, although most of the far-out theories about Google taking over the travel industry tend to say that Google will transition from an advertising to a booking platform and would become an online travel agency — a switch that Google has shown little appetite for — Huber isn’t even making that argument.
Instead, he’s arguing that Google will serve as a listing platform, and build advertising around it, and that hosts, with an assist perhaps from property managers, would see direct bookings flow like lava down a hillside because these offers are inherently the best and cheapest deals for both hosts and guests.
Both Google and Airbnb Face Headwinds
Google killing Airbnb begs the question of which of the two has momentum versus the other. Both face big antitrust or regulatory challenges, and it’s hard to choose which one has the more daunting obstacles.
A little deeper into his twitter thread, Huber retreats a bit from his Google killing Airbnb opener, and pleads for “nuance.”
“Of course Airbnb will always have users,” he tweeted. “But over time many guests will go on google, find a vacation rental in an ideal location, click through to that website & book w/o paying hundreds in fees. 20 yrs from now ABNB will be a glorified lead generator.”
When it comes to predicting the future of companies two decades from now, I’ll pass on that one, considering it is difficult to look even two or three years ahead to see what the business world would look like.
So, alas, in Huber’s view, his talk of Airbnb’s death was apparently bombast.
When a twitter user tells Huber he downplayed the importance of factors like trust and reliability when considering direct bookings versus reservations through Airbnb, Huber retreats a bit further, tweeting:
“I think there will be an increased number of guests going directly. You can do all of those things without giving a huge chunk to Airbnb.”
Finally, that’s something we can agree with: There are many hosts doing everything they can to generate direct bookings, and they’ll likely have a degree of success. But I don’t believe “Google will kill Airbnb,” or that Airbnb will close shop anytime soon.
Note:This story has been updated to include additional information on Airbnb’s take rate. It also clarified Google’s role in the travel industry.
Book direct with the airline or hotel instead of gong through a middleman like an online travel agency.
Consult JoinSherpa.com to keep abreast of ever-changing Covid lockdown rules and destination entry requirements and use itinerary organizing tools like TripIt. If you are a Gmail user, Google Travel likewise organizes your travel bookings, although it can be glitchy.
Download the hotel’s app to access functions such as earlier check-in as soon as your room is ready.
Additional Tech Hacks
We’ll add a few favorite tech hacks of our own.
Use FlightAware to see the location of the plane that’s hopefully en route for your departure. Some airline apps have this feature. A couple of weeks ago FlightAware informed me that the plane that was scheduled to take me from Puerto Rico to New Jersey would be arriving in New Jersey around 5:20 a.m. while United Airlines misinformed me that flight would be taking off more than an hour earlier. The flight actually took off around 15 hours later.
Speaking of United, you can now pre-order beverages and food on some U.S. domestic flights, although it too can be clunky.
Sign up for a virtual private network such as Surfshark so that once you arrive at your foreign destination you’ll still able to view apps such as Sling.tv, which wouldn’t otherwise be unavailable.
When shopping for deals, make sure to consult mobile apps for companies such as Tripadvisor, Expedia, or Booking.com because sometimes mobile deals will be lower than desktop prices.
Download lots of movies to your phone before your flight in case there are slim pickings on board.
Contact your cellphone company to see if it will give you a discounted rate for mobile calls in a foreign destination. T-Mobile has such a program, for example.
There are tons of other travel hacks available. Send us your favorites.
Google Travel’s flight and hotel offerings gained the most desktop traffic market share in the U.S. during the pandemic while Tripadvisor lost the most on a percentage basis, according to Similarweb’s June data.
“Google Travel now owns one-fourth of all (U.S.) desktop visits to top travel sites,” Similarweb said.
In its earnings call about second quarter financials Tuesday, Google said travel and retail were the drivers of its advertising revenue during the period.
The following chart shows Google Travel’s U.S. desktop market share increased 6 percentage points to 24 percent in the first half of 2022 compared to the first half of pre-pandemic 2019.
U.S. Desktop Market Share Traffic Gains/Losses H1 2019 Versus H1 2022
“Booking has also gained 2 percentage points of share in the U.S., and only Kayak (-1 percentage point), Delta (-4 percentage points), and TripAdvisor (-5 percentage points) have lost share,” Similarweb said.
There are two points to keep in mind: These numbers don’t include traffic from mobile devices, and traffic to Google Travel often gets sent along to online travel agency advertisers.
Ever wonder about the daunting challenge that Expedia Group CEO Peter Kern inherited from predecessors Dara Khosrowshahi and Mark Okertstrom when Kern took the chief executive spot under Barry Diller in 2020?
The pandemic notwithstanding, Expedia Group captured its infrastructure issues in one slide as part of an investor presentation at Cowen 50th Anniversary Technology, Media & Telecom Conference Wednesday.
Many of the Group’s major brands, from Expedia to Hotels.com and Vrbo, had their own product, marketing and tech teams who were working at cross-purposes and competing against each other.
Competition can light a fire under a marketing group, for example, but did it make sense for Expedia and Hotels.com to bid against one another in Google search, and likely drive up costs?
Elsewhere in the presentation Expedia noted that before it undertook its drive to simplify things it had more than 10 competing brands, five loyalty programs, more than 10 checkout experiences, and “siloed data lakes.”
In the interim, Expedia Group has made a splash consolidating many of these teams, and shedding brands including Egencia, SilverRail, Alice, Classic Vacations, and Expedia Local Expert. Not to mention BodyBuilding.com, which Expedia acquired when it bought Liberty Expedia Holdings.
The goal is “to build a single tech platform,” the presentation said.
We’ve heard Expedia talk of building a solitary tech platform for many years under prior regimes, but it seemingly never happened.
Just look at their market caps — Booking Holdings $92.05 billion and Airbnb a humbling $77.8 billion.
The Wall Street Journal reported Sunday that Booking’s share price has notched “single-digit gains” over the last six months, while “Airbnb’s shares have lost nearly a third of their value.”
Reporter Laura Forman attributes some of the discrepancy to the comeback and relative affordability of urban hotels versus soaring rates for short-term rentals.
Not to mention, we’d point out, seeming out-of-control cleaning fees with little rationale for the heft of the cost.
Airbnb’s average daily rates climbed 37 percent in the first quarter when measured against the first quarter of pre-pandemic 2019, according to the Wall Street Journal. Citing STR data, the story said average rates for urban hotels around the world in April haven’t yet inched back to pre-Covid levels, while the average price of a room night for hotels as a whole has risen less than 15 percent in April compared to the same period three years ago.
Of course, as the story notes, Airbnb has the brand advantage over Booking.com as Airbnb spent less than a quarter of its revenue on sales and marketing in the first quarter of 2022 while Booking shelled out more than half its revenue on sales, marketing and related expenses.
Still, there’s a reason that Booking.com spends so much on performance marketing on Google even as Airbnb has reduced the percentage of revenue it spends on marketing on Google and elsewhere since 2020. The reason Booking.com spends so much? It seemingly is working.
The Wall Street Journal cited Sensor Tower data tallying Booking.com’s app installs in April as being 13 percent higher than in January 2020 while Airbnb’s app downloads fell 12 percent in the same timeframe.
“Ironically, Booking has managed to reinvigorate interest in its namesake brand this year by promoting its tired image,” the Wall Street Journal said. “A Super Bowl commercial for Booking.com featured The Wire star Idris Elba mocking the brand as having ‘never been accused of being sexy, flash or lit,’ unless, he adds, ‘we’re talking literal.'”
We’re unsure how much weight to give to Booking’s Super Bowl ad — which seemed to underwhelm — in its app download number uplift.
The signs of life in Booking’s stock price compared with six months ago has a lot to do with the comeback of cities, the reopening of Europe, where Amsterdam-based Booking.com has most of its strength, and the relative affordability of hotels.
After all, while some people wrote off cities during the pandemic as being permanently scarred, Booking’s Glenn Fogel argued — as did Peter Kern of Expedia Group and Steve Kaufer of Tripadvisor — that urban hotels and cities would be back. It appears as though that’s starting to take shape.