Livemint: January 14, 2015
Mumbai: Google Inc. on Tuesday launched flight searches in India, intensifying competition in the online travel bookings space.
"Now, you can search directly for flights within Google or access google.co.in/flights to quickly find, compare and book flights from your mobile device, tablet or desktop," Google said on its official blog.
Cleartrip.com, Makemytrip.com, Yatra.com, ezeego1.co.in and Goibibo.com are among the top online travel agencies in India. Google's new service also competes with ixigo.com, another popular flight search service.
"We think this will have limited success in the Indian market, as the consumer pricing on the air market is fairly homogenous across airlines and online travel agents (OTAs)," said Subramanya Sharma, chief marketing officer at Cleartrip.com. He said similar projects have been launched earlier but met with limited success.
Online agents typically charge a transaction fee from buyers. The Google service, on the other hand, redirects users to the concerned airline's booking page, which enables consumers to avoid the commission paid to the travel agent.
A flight search service such as Google or Ixigo usually earns revenue through clicks and lead to airline or hotel booking sites along with contextual display advertising.
Rivals are unperturbed. Aloke Bajpai, chief executive officer and co-founder of Le Travenues Technology Pvt. Ltd that runs ixigo.com, said Google's entry is a validation that such a service is a more consumer-friendly business model.
"What remains to be seen is whether all OTAs and airlines will participate in their search paradigm, since there will be some anxiety over whether participation will lead to increase in their marketing spends," Bajpai said.
He also said customer loyalty for specific web sites is important. "Most of Ixigo's flight search traffic comes from loyal direct users and we have built our business on the back of word-of-mouth growth, so we don't expect any immediate impact on our traffic or flights business as long as we keep innovating," Bajpai said.
The Indian online travel market will be worth some $12.6 billion by 2016, travel consultancy firm PhocusWright estimates.
"It will be interesting to see how Google navigates its users across vendors' mobile sites and apps, something which even the largest metasearch players are trying to solve," said Chetan Kapoor, research analyst (Asia Pacific) at PhocusWright. "Nevertheless, every tweak or evolution in the way Google displays search results is closely followed by advertisers, including travel suppliers and online intermediates, who happen to be among the highest spenders with the search engine."
Despite Google's strength in web searches, the success of flights and hotel search products is dependent on not only integration with key airlines and intermediaries in the country but, most importantly, displaying dynamic fares and supporting multiple-perhaps even complex-itineraries, which have propelled OTAs ahead of the curve when it comes to online travel bookings, Kapoor said.
In a related development, Goibibo said it has become the first Indian website to partner with Google for its flight search feature.
"Goibibo.com is the first OTA in India to partner with Google for flight search. This is in line with our philosophy and core differentiation of delivering the fastest booking experience to our travellers," said Ashish Kashyap, founder and chief executive officer of ibiboGroup, which owns Goibibo.com and redBus.in, a bus ticketing service.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.