Let's connect some dots.
Dot 1: Google is in a quandary. It needs to enter big markets with high growth opportunities.
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Dot 2: Google likes the travel industry. I've heard estimates that about 10% of its revenues are attributable to travel.
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Dot 3: There's a big travel-related search market that Google hasn't cracked. It sits behind the walls of the GDSs. [more]
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Dot 4: ITA Software has deep expertise in airline pricing, shopping and availability searches. ITA powers several of the big-name travel sites, including Orbitz.
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Dot 5: An ITA-powered Google travel search engine could (would?) gut the need for GDS-based distribution of simple price and shop queries.
Seems like a pretty straight line through these dots. Not that it ends with Google doing simple searches. Think about Google's ability to be the
ultimate direct connect platform. Suppliers place their ads and inventory with Google, travelers search and find deals they like, and Google lets them make just one more click – and ta-da – the booking is completed with the supplier.
Of course it's more complex than that, but not so complex that the Google Travel team is throwing up their hands and saying, "Too hard, too hard!" On the contrary, I'd bet that those bright boys and girls are drooling at the prospect of eating the GDS industry's lunch.
Going after the search and booking business from the GDSs seems like a natural move for Google. Are there other reasons for it to
acquire ITA? Sure, especially if you think about the growth in travel searches done on mobile platforms.
If Google succeeds in winning a big chunk of GDS bookings, then there are some interesting issues for corporate travel. What happens to the GDSs' ability to fund travel agencies with financial incentives? Lower bookings probably mean lower incentives, which likely means higher booking fees from the TMCs to corporate accounts.
What about the ability to implement travel policies at the point of sale? Could Google come up with a travel search tool tailored for the corporate market? Why not? After all, those tools all provide shopping, pricing and availability functions.
Yes, there is a fulfillment service feature packaged with each of the online booking tools and every travel agency. But couldn't Google take a page from Amazon's playbook, and be the front-end shopping/booking tool, and route the fulfillment component to a designated TMC? Can you imagine seeing TMCs and OTAs appearing in a booking path, each with their transaction price and customer ratings in plain view?
Looks like just a couple more dots to connect – definitely not too hard.
Scott Gillespie is the author of Gillespie's Guide to Travel + Procurement. These thoughts are excerpted with permission from his blog.