Google tightens the screws on OTAs: how can they fight back?

Google’s recent spate of new product launches and acquisitions has undoubtedly raised many an eyebrow and pulse among travel’s old guard intermediaries this summer. Most concerning is the incredible functionality, transparency, and ease of use of Google’s Hotel Finder and Flight Search, which enable users to refine, sort, and compare travel searches like never before.

Google’s intentions toward the online travel vertical were made plain after its US$700 million acquisition of ITA Software, giving Google unprecedented access to flight data and advanced search technology, which was swiftly put to use.

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A recent Experian Hitwise travel search study revealed that neither of Google’s search products have broken into the top 50 highest traffic travel websites in the US since launching this summer. The top 10 paints a very rosy picture for OTAs and meta-search engines, but how long before we see a significant re-shuffle?

# 1: Expedia – 12.54% of visits
# 2: – 10.11% of visits
# 3: Orbitz – 7.41% of visits
# 4: Travelocity – 6.35% of visits
# 5: CheapOair – 5.61% of visits
# 6: Hotwire – 5.19% of visits
# 7: Yahoo!Travel – 5.07% of visits
# 8: Bing Travel – 4.14% of visits
# 9: Kaya – 4.01% of visits

Google Flight Search came in at #391.

At a recent EyeforTravel summit, Google’s head of travel claimed that no OTAs were deliberately ignored, but it’s easy to see how both search products stand to create a lucrative OTA advertising platform for Google in which the highest bidder will likely secure the consumer.

So what can OTAs do to hold their ground and protect market share?

Pump more money into their marketing campaigns, entrench their brand and services with customers to cement loyalty and increase switching costs. See Expedia’s current multi-million dollar TV advertising campaign across Europe.

Invest more in technology to drive greater speed of search, price transparency, and enhanced user experience to attract, delight, and retain loyal customers. See Hipmunk’s inspired flight search by “agony/ecstasy” or Hotel Tonight for its beautifully simple booking system

Focus more on great value package deals and loyalty reward schemes to satisfy today’s time starved, budget-conscious, and hyper-savvy travelers – areas where neither of Google’s products can compete… yet.

Forge strategic partnerships and alliances with strong suppliers à la Air Asia – Expedia tie-up. Co-opting in this manner enables rivals to join forces and competencies to create a long-term competitive advantage.

Enter the social/flash buying melée to give existing customers greater value and “win” (read as bribe) new customers. Prime examples of this are the Expedia-Groupon Getaways and Priceline’s recent Tonight-Only Deals . Howeve, with both Google Offers and Facebook deals in Beta, the race for mindshare and adoption is on.

Interestingly, following on from Google’s acquisition on Zagat, Kayak today announced a partnership with Frommer’s and Budget Travel in which user reviews and comments are aggregated and displayed alongside search results.

All these parries and counters clearly demonstrate how high Google has raised the stakes in the travel search game, and how seriously intermediaries are taking the threat to their long-uncontested business models. Who will win out in the battle for mind and market share?