Travel aggregators and Indian online travel agencies (OTAs) that take a cut on the tickets they sell must have received an almighty fright yesterday, when Google announced that its Flight Search business is being launched in India.
Anything that mentions Google and flight bookings may seem to potentially spell doom for online Indian travel entities like Yatra and Cleartrip, which have garnered significant venture capital money, and some like MakeMyTrip, which have gone public and command a pretty respectable market cap at a little over $1 billion.
One big reason to take this threat seriously is the service's ability to seamlessly integrate things that are part of our everyday life, such as Mail and Maps, to buying airline tickets, a simple one-click-away proposition within Google.
This is the way that Google's Flight Search feature works (for those who haven't encountered the service before): A calendar containing the time period in which you're travelling will display the lowest fares for the route that you've picked, with an accompanying graph that shows how prices go up or down based on seasonal highs and lows that are pegged to things like school vacations, religious holidays, and similar events. You will even be given a list of "Best Flights", which will provide the choicest trade-offs in convenience and price. Google has leveraged its Maps to ensure that all of this can be done with a full visualisation functionality that then allows for easy clicks onto alternative destinations.
So far, the only travel aggregator that has been picked as a "Partner" for Flight Search India is online travel site Goibibo. Another partner selected from the airline category is Jet Airways. Partnering enables OTAs to offer their itineraries on Flight Search in a clearly demarcated category, and, in the case of airline partners, to sell tickets directly from them.
Some entities, such as ixigo, which directs online surfers to airline websites for ticket bookings, think the introduction of Flight Search will cause carnage in the industry. But online travel operators such as Cleartrip don't seem to be too fazed by the turn of events.
"From what we know of the Indian market, this will have limited success, as difference between ticket prices on an airline's website and an OTA is marginal," said Subramanya Sharma, chief marketing officer of online travel agency Cleartrip, to The Economic Times.
So, who to believe in the final analysis? Probably the logical thing to do is evaluate the transformations in the global travel industry ever since Flight Search made its debut, which was in 2010, after Google purchased the software company ITA for $700 million.
Apparently, Priceline and Expedia have both remarked about how little effect Google Flight Search has had on them. And Google hasn't done a whole lot to publicise the service in the past in the US or in Europe, so it's logical to think that it will follow suit in India. One good reason for this is because Google wouldn't want to do anything that messes with its online travel agency advertising base, a big revenue generator via Adworks. Apparently, paid ads from travel agencies far outstrip those by airlines 68 percent to 21 percent.
Then there's the fact that Google Flight Search predominantly coughs up schedules and fares from airline sites that aren't all that attractive to someone used to sampling a range of choices on the net. Google also doesn't seem to be banking on Flight Search as a commercially viable product so far; instead, it seems happy for the service to act as an additional feeder of traffic that will ultimately generate revenue in other ways.
The only fear is that if and when Google decides to get serious about making some money from travel searches, the ones without brand cache could end up watching their business fade away overnight, and there's probably very little they will be able to do about it, considering how integrated the search platform is with our daily lives.