The travel industry needs to create a travel vertical and bypass Google as the search giant continues to consume the profit of companies.
Such was the view of one expert speaking at the Travel Technology Initiative’s Travel Futures conference last week.
On Holiday Group chief executive Steve Endacott said Google was killing profit as companies get into bidding wars on key search terms.
He added that figures show bid cost inflation has increased 20% year-on-year. “The closer you are to your customer at the moment, the better,” he said.
Endacott said that price comparison sites would become more prominent as would travel vertical services offering travel-related maps, video and reviews and bypassing Google.
The issue of whether Google is becoming a less profitable way of bringing in business was also raised.
Viator founder Rod Cuthbert said: “For the market generally the cost per key word is going up but in the overall landscape, for individual hotels spending money on promoting themselves it is still cheaper. It is uncomfortably powerful in its breadth and reach across the market.”
Speakers were also asked whether Google was a better option than a brand such as Expedia, which could present itself as the Amazon of the travel industry.
Hilton Group’s vice president of distribution services Jamie Cole came down on the side of the search giant saying that the cost of a booking from expedia was more than that of Google.
Endacott also predicted the revival of call-centres as online conversion rates remain in the low single digits compared to conversion on the phone of between 15 and 20%.
He added that his company had put a lot of content on its sites but it did not drive people to book.
“The problem with a website is there is no emotion and as soon as you have contact with someone at the call-centre there is the emotional connection.”
Vertical Group chief executive Peter Healey added that one of the reasons online conversion is still low was because there is so much choice on the internet.
“Most people are paralysed by the richness of choice they have online. They come on and take a stab in the dark and if they have not stabbed you….”