Google recently sent shockwaves through the travel industry when it announced plans to acquire ITA Software, a company little known to the general public, but one that is integral to the distribution and sale of airline tickets.
ITA’s database forms the base of several of the leading airfare search engines. While Google does not plan to sell airline tickets directly to the public, it’s entry into the market will change the way the game is played -- though no one is quite sure exactly how at this point.
The businesses most likely to be immediately impacted if the Google acquisition is approved by regulators are those known as travel meta-search engines, including Kayak and Bing Travel. These engines allow users to compare prices offered by online travel sites as well as those taken directly from airlines and hotels. But unlike online travel agencies like Expedia, Travelocity and Orbitz, they don’t allow users to book with them directly.
While Google would not control pricing displays, online travel agencies could face a big problem if the search engine were to increasingly send consumers directly to airline and hotel sites.
While he shares some concern that Google “is growing overly powerful,” veteran travel journalist Arthur Frommer says he believes consumers will benefit from the entry of the search giant to the airfare market. In a recent article published in the Toronto Star, Frommer argues that the current players in the industry have failed to provide travellers with “candid, unbiased” lists of fares, despite promises to do just that. “The current situation is untenable,” Frommer says. “It needs Google to straighten things out.”
