How travel will change? It will because it won’t.
The advent of the internet and primarily the access to knowledge that came about with the rise of search engines disrupted the travel industry and resulted in a seismic shift in how people travel.
Online travel companies that have become household names around the world are Booking.com, Kayak and Agoda — part of the $70.82B behemoth which is the Priceline Group as well as Expedia ($15.72B), Hotels.com (an affiliate of Expedia) and TripAdvisor ($8.56B).
However, these companies would not have grown to the size that they did without the presence of search engines. It was through Google primarily that users got access to their booking engines.
Even today, we can see their dependence on Google with travel and tourism contributing billions in revenue.
This is because travel in general, is interest driven a lot of the time. Users express a general interest in travel but the overwhelming majority of travelers will travel perhaps no more than a handful of times per year.
This means, throughout the year, they have no intent to make bookings or purchases. Only once they make a decision to travel, they move into the intent stage where they are actively searching for flight tickets, accommodation and more.
Naturally, this search happens on Google and search ads are the best way to reach these users with high intent. These searches repeatedly happen on Google despite travel companies attempting to move them off Google and get users coming to them directly.
They’ve attempted to do so by building brand loyalty through various means and channels. Whilst one can’t attest to the success of these campaigns, the amount of advertising spend these companies still incur on Google seems to indicate that they have not been overly successful in getting users to come direct.
My hypothesis is that this is because a large majority of users would rather choose a cheaper option with a new provider than a more expensive option with an existing provider. Due to the very nature of flash deals and best price guarantees, users know that by traversing various sites, they may potentially find one site that is cheaper than others — and that is exactly what they intend do — initiated through a Google search.
That leaves the travel industry in a precarious position of being overly dependent on Google which has over the years, slowly made moves into the travel sector.
In 2015, they launched Hotel Ads. In March 2016, Google launched a feature within search that allowed users to conduct price comparisons within search itself.
And now, in September 2016, Google launched Trips which combines existing Google services such as Google Maps and Google Now to create THE travel assistant — Google’s most important and relevant product to date. It has combined everything a traveller does on a trip within one application.
Despite the initial hypotheses, I am skeptical of Google having launched Trips as a competitor to existing destination apps.
I believe Trips is the next big push for Google to monetize travel further. How?Ads. Google has always been an advertising company at its core and Trips is a way of capturing more traffic and generating more ad revenue.
Imagine Duty Free shops at airports being able to serve ads to users who have an upcoming flight within the next 7 days.
Or showing ads to users who have an upcoming trip to Bali planned.
Or showing ads to travelers who are currently in Paris and have demonstrated interest in sightseeing.
The next generation of Google ads could well be in-app ads and if Google does manage this technological breakthrough, they will continue to dominate the access of information within the travel industry.
As a marketer, I’m excited to see what new capabilities Trips will bring to marketers and how Google will continue to evolve the product.