Google is working on a new package holiday product eyeing an opportunity in a market that remains stubbornly resilient in Europe.
Richard Holden, Google vice-president product management, admitted the package market was not something the world’s leading search engine “understood well”.
“Europe is a very big market,” he said. “There is certainly a consumer desire [for packages] and there is a lot of decision-making challenges for understanding all that information.”
The package product will help Google users to aggregate their options into one place so they do not have to do complex multiple searches for holiday components.
Holden said Google was approaching the package market as it has other sectors, with the view of offering consumers transparency, choice and access to the right information.
“At the end of the day consumers want choice and flexibility. We can play a big role in the distribution of packages that already exist and create a better dynamic packaging market.
“Customers want to know what the trade offs are. There is not great comparison shopping out there in the package holiday space.”
Despite the threat posed to the traditional package by the internet and technology, around half of the holidays sold in the UK are still packages.
And in Germany, Europe’s largest market, that figure is more like 80% due to a mixture of market regulation, customer preference and tradition.
This nuance of the European travel scene has always posed huge challenges to the large US OTAs and travel firms seeking global dominance.
Their models were developed to serve the single-component US market where holidaymakers are more like to drive or take a budget flight bought separately.
The move into packages also potentially opens up overseas entrants to a minefield of regulation in Europe where rules govern the selling of packages requiring customers to be financially protected.
Under a new Package Travel Directive, due to come into force in 2018, the scope of regulation is set to expand to “assisted travel arrangements”, the definition of which remains subject to interpretation but which is meant to cover online ‘click through’ sales.
If Google is deemed to be linking separate holiday products to create a dynamic package for sale it could be considered a travel arranger and therefore would have to be regulated according to where it is established.
This itself could be a point of contention for Google, given its relationship with Europe over its corporation tax arrangements, but if Dublin, where it has its European HQ, is deemed to be where it is established Google could face having to place a bond as, it emerged, failed OTA Lowcost Holidays was forced to do.
For traditional providers, Google’s promise to offer transparency could be a major advantage as it would presumably state clearly that financial protection, and liability for the product, are among the advantages of buying a package even if they are more expensive.
Google is also working on providing greater transparency for users of its Hotel finder functionality, Holden said.
It has been enhancing property descriptions and amenities information and offer users great filtering capabilities to hone in on what they want.
Richer content including photos, maps and Street View links as well as aggregated and Google’s own reviews are also being added to provide more decision-making content.
Holden said that Google was also working with commercial partners, particularly hotels, on its booking units allowing the additional of tagline information on incentives to book.
Google is pleased with the progress it has seen for its Flights search service which Holden said has doubled its user base every year for the past three years.
“We look at this from an organic user perspective. We feel we have built something very differentiated based on speed and user requirements.
“It has a very loyal user base. People are going direct to the website now. We have been focused in the last year on launching in new markets.”
Holden said Google has plugged gaps in its data in Europe and so has been more aggressive rolling out Flights.
“We have a full set of data in their now and we are very happy with where the product is today,” said Holden.
“Previously if you asked carriers they would have said Flight Search is not that important. Now we are typically number one or two meta provider.
“I think we are catching a few people by surprise. We have been working hard on making it mobile, fast and user friendly. Speed is usually the most appealing aspect to consumers.”
Holden said Flights search was not just about selling flights on price but on the specific requirements the consumer has but said Google would like to have more detailed information from carriers about their fares like economy plus.
Flights search was the product that came out of Google’s controversial acquisition of ITA Software for $700 million, which gained regulatory approval in the US in 2011.