Metasearch, Fare Finders, Google: Steeper Competition in the Online Travel Marketplace

Metasearchs, Fare Finders, Online travel Agencies and Google Flights: The Competition in the Online Travel marketplace is brutal out there

Booking flight can be a huge hassle.  In the past, travel agencies played a very important role in planning and organizing travel for many consumers. Travelers had to call their travel agents, give them their itineraries  for the flight, and the travel agent would make international phone calls planning your flights with various airlines and hotels and booking the ticket on your behalf. Of course all this was very cumbersome.

Technology has however revolutionized travel in the last ferw years and made things a little more simpler. One of the products of the internet that has had a direct influence on travel has been the development of online money transfer processes and the integration of technology into the ticket sales process or the online booking engines as they are popular known. Today, travelers can plan their flights from the comfort of their homes. There's no longer the adrenaline rush of hopping from one ticket agent to another hunting for bargains and available seats. Customers can simply log in to their favorite airline website and plan their trip and even check in online!

Yet this process has even been refined further. While flying with a single airline can be simple and straight forward where you familiarize yourself with their processes and even get to earn and accumulate lots of miles in the process, it's not a luxury many can afford in today's economy.

Travelers are increasignly hunting for travel bargains. Savings of upto $200 can be just a few clicks away. So systems have been developed on the internet that enable travelers to take advantage of competition in the travel market and personalize their trips with online travel agents like Expedia, Opodo, Priceline, Travelocity and more where you can search for your flights and book in just 30 minutes or less or more depending on you preferences.

Another useful category in the online travel market is the evolution of the metasearch engines or the fare aggregators. These are advanced search tools, that enable you to simultaneously search  countless travel agencies and travel provioders such as airlines, hotels and car hire in a very short time. But unlike the Online Travel agents, you cannot book your flights on the meatsearch engine; instead it will suggest websites where you can complete your booking. Examples include Cheapflights.com Mobissimo, Kayak and more.

The metasearch tools simply scrapped information from the various airline's online booking engines through a technique known us "screen scraping". Screen scraping is a way of crawling through the airline websites, getting content from those sites by extracting data from the same human-readable HTML feed. This method of obtaining data placed extra costs on airlines and many airlines outlawed the practice. Most metasearch tools today obtain their data from the engines of online travel agencies like Expedia which are more than just happy to obtain useful referrals and revenues from the metasearch providers.

These travel websites also offer travelers useful information such as departure dates, duration of flights, stopovers, fare comparisons and lots of other travel information including the available accommodation in your destination.

It's estimated that the average consumer visits three or four websites when shopping online for an airline ticket. Metasearch tools bring countless of those websites to the consumer with a single inquiry. Normally the websites for the online travel agents will be opened in a new window and each of those windows will display fares and  additional travel infornmation for all the airlines serving that route.

Apart from the technological challenges of obtaining information directly from travel providers, many of the metasearch engines are running into financial problems as the revenues are dwindling. Airlines are now unwilling to pay commissions. The model of the metasearch was to serve as middlemen in the online travel marketplace, referring customers to airlines, hotels and car hire booking engines for a commission but many airlines are keen on eliminating these commissions.

In the old days of travel agents, a lot of airline revenues went to travel booking agents for every customer booked on the airline. Today, to streamline these costs, airlines and other travel providers are increasingly investing millions of dollars on building their booking engines and optimizing their prroduct to be easily accessible to consumers. Consumers are now increasignly being encouraged to book flights directly on airline website for small discount which still allows the airline to make substantial savings that could have gone to the online travel middlemen.

Google Flights: Google sticks a dagger in the back of online travel providers
Google Flights
Another issue is the entry of Google into the online travel market with the launch of Google Flights(http://www.google.com/flights ). In September 2011. Google launched an online air fare search tool that enables you to find the lowest air fare between two locations.

Google's airfare search tool was unveiled late last year, offering what Google says is a faster, more flexible online tool for finding the lowest fare between two locations. If you search the term "Nairobi London Flights" for example, the first results on the search engine results pages will be from the  Goolge Flights tool offering you the various flight choices and cheapest fares to those destinations. This will definitely eat into the revenues of the established online travel companies. The Google Flights tool shows prices for all carriers and allows travelers to filter flights by price, number of stops and duration, a service also provided by online travel websites but Google has a huge advantage.It has the pie and the dagger.

Other features on the site let travelers see ticket prices over a span of dates and from several airports in a region at the same time. The Google Flights feature is also very fast unlike the other metasearch and fare comparison websites which usually take lots of time to load and very user unfriendly especially in regions with slow internet connections.

The Google Flights tool will enable you to shop for a plane ticket as easily as doing a Google Search! In minutes!  So the metasearch and online travel agencies are facing lots of pushback and very steep competition.

The Online booking industry is worth billions of dollars and for consumers, there are a billion reasons to smile as steep competition in the online travel market will not only lead to more personalized services as companies strive to avoid losing existing clients to competitors but also lots of fare deals. Online travel companies will also continue improving their product to meet consumer demands as competition heats up.

Faced with these prospects, many metasearch engines have decided to eliminate commissions and adopt the more traditional website monetization methods like PPC advertsing e.g. Google Adsense, Affiliate marketing and more which makes substantial amount of money given that millions of travelers visit these websites when traveling their trips but is nothing compared to the commissions from the airlines.

It will be interesting watching the online travel marketplace in the next few years but if you are an internet entrepreneur interested in investing in the online travel industry, this is a niche you should best avoid; with competitors like Google, Expedia and Priceline, the odds of breaking even are hopeless.

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2 Responses
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