Is Google about to make a big push in online travel?
January 17, 2014 Leave a comment
January 13, 2014, 1:47 PM ET
Is Google about to make a big push in online travel?
Comments by the chief executive of discount airlines Ryanair have sparked speculation that Google Inc. may be considering a big push in the online travel market. In a Sunday story in the Irish Independent, Ryanair CEO Michael O’Leary spoke of a new pricing system partnership with Google GOOG that “blows everyone else out of the water.”“Google will say, ‘Here are the fares,’ then you click straight through to Ryanair or someone else,” O’Leary was quoted as saying. “It blows everyone else out of the water.”
The new system will be rolled out in March, he told the newspaper. Google downplayed the report.
“We already have relationships with a number of airlines across the world but are always looking to improve the results by signing deals with more,” a spokeswoman told MarketWatch. “We have nothing new to announce at this stage.”
The Internet powerhouse already offers an airline search and booking services. Google launched its flight search service in the United Kingdom in March last year, the spokeswoman said. The company also rolled out a hotel finder service in 2011, she added.
But Janney Capital analyst Brian McGill said the report on the Ryanair CEO’s comments points to speculation that Google’s may have bigger long-term plans in online travel, although he noted that the Internet company may not want to move to aggressively in this space.
“They will not want to directly compete against Priceline PCLN and Expedia EXPE , given that they are two of the biggest advertisers on Google,” McGill told clients in a note.
Still, he added, “It really will be worth watching if the company tries to compete against the online travel agencies on hotel reservations in a serious fashion.”
“It is a constant and persistent threat that has some industry participants we speak with concerned and others not at all,” he continued. “However, it is interesting how many believe this could be the year that Google does make a more serious push into e-travel and it will bear watching where it goes from here.”
Google shares were up 0.5% Monday. Expedia was down 1%, while TripAdvisor TRIP was off 1.2%. However, Priceline has up nearly 1%.
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