After announcing in February last year that it would shut down its Book on Google option for hotels (which it did in May), the search giant confirmed last September that it was to phase out the feature for booking flights as well.
It has already been phased out for non-US users since last September, and will be completely disabled in all markets by the end of March this year.
Google said the reason for the shutdowns was that consumers’ preference had shifted to booking direct. But there were other forces at play too, chief amongst them, pressure from Google’s travel advertising clients. This likely had a hand in Google’s decision to shut down its own selling of flights and hotels. These OTAs, airlines and accommodation providers resented having to compete with their host.
From 2015 to 2019, the OTA market saw growth of 9,4% compounded annually, reaching US$480,3bn (R7,32tn). This rapid growth rate and future growth potential intensified Google’s focus on online travel.
However, by 2019, the OTA market was already blaming weakened visibility in Google search results for poor Q3 earnings.
“Google really ramped up its activity in online travel prior to the pandemic. When looking at 2019 alone, Google launched its Travel Hub, added flight check-in and hotel booking abilities to Google Assistant, attached lodging listings to its Maps function, created a search site for hotel availability by destination, and Alphabet [Google’s parent company] even launched its own ride-hailing app,” said Ralph Hollister, Travel and Tourism Analyst at GlobalData early in February last year.
Then came the pandemic, which resulted in dwindling market share for OTAs, which rely heavily on Google Search advertising according to GlobalData, which noted that the OTA market value decreased by 60,4% year-on-year in 2020. This dramatic drop amplified OTAs’ existing concerns about the growing presence of Google in the market, and the obvious problematic nature of having to compete with their hosting search engine.
Now the travel app still exists on Google, and the company says it will continue to allow travellers to click on airline and hotel aggregator links and book their flights and stays. Google says it now reroutes users to its display of advertising partners and apparently no longer tries to compete with them.
Philipp Schindler, senior VP and Chief Business Officer of Alphabet, Google’s mother company, said in April 2022 that the travel sector was the second-largest contributor to growth in Google’s advertising business.
