The approaching wave of mobile OS travel buttons (Apple iTravel, Google Travel, Bing!Travel Mobile) need to be viewed within a historical context of travel distribution. At the heart of these efforts is a new customer interface for travel.

During the pre-Web days, traditional travel agents controlled distribution through their mastery of GDS cryptic formats. A travel agents’ worth (especially in a corporate travel setting) was often gauged by their proficiency on the GDS. The customer often viewed the travel agent’s systems as a black box with almost mystical capabilities. In this environment the only consumer interface to travel was the telephone or face-to-face conversations with a travel agent.

The Web created a new era of transparency for the travel process. Supplier sites, Online Travel Agents (OTAs) and meta-search engines suddenly removed the mystery behind travel pricing providing consumers with instant access to travel prices and schedules. This transparency has reshaped all sectors of the industry. Consumers now can compare a variety of sources and book entire vacations online. Even for those remaining traditional travel agents, would quickly admit that their conversations often include “I was looking at prices online and I found…). The Web also has changed the ground rules for distribution. Though the GDS still dominate offline and much of online distribution, direct channels through supplier direct websites and new alternative distribution platforms such as Farelogix (supported by the OpenAxis Group) are causing tensions in the traditional GDS-centric travel distribution ecosystems both economically and through the holding back of ancillary services from traditional distribution channels.

It is my belief we are at the beginning of a radical change in distribution this time triggered by the mobile revolution. With the mass adoption of smartphones and the growing influence of tablets, mobile devices are un-tethering the planning and booking process from the desktop altering consumer behavior and again changing the ground rules for customer interfaces. All the current Web strategies are carrying over to mobile with most major travel companies optimizing their sites for the mobile Web (if not you are in danger of being left behind!) and many travel companies have created native (downloadable) apps for specific devices. The problem with this natural evolution from the Web to mobile is that it has created a fragmented environment where the traveler has to either engage with multiple mobile Web sites or download multiple apps. Shopping multiple Web sites online is not a big issue, but on mobile devices it can be more challenging.  Even the traditional, one-stop-shops, the  OTAs have fragmented their mobile offering reacting to the need for last minute hotel deals. Meta-search may be best positioned for mobile, but these sites lose the ability for continuous engagement, an important mobile opportunity, as the bookings are still spread across multiple sites. Consumers are hungry for a simple integrated mobile travel solution. This is opening the door for the OS travel buttons. Companies such as Apple, Google and Microsoft are masters at user interfaces. There is ample room to simplify the planning and booking process especially with the proper integration of voice, touch and gestures. This could revolutionize mobile travel interfaces. Travel companies need now to innovate with mobile interfaces by adding voice, simplifying steps through storing of preferences, and exploring other new interface methods. Mobile may act as a catalyst for further direct supplier distribution as airlines sell ancillary services on mobile directly to their best customers. Even when the OS buttons arrive they need to hook up to some existing travel e-commerce infrastructure, but the industry can ill afford to let another layer get between themselves and their customers.

The much anticipated  integration between ITA Software and Google arrived today with the launch of Google Flight search. The most visible enhancement in this new interface is the instant loading of fares and schedules when you enter the city pairs. The ability to launch flights from the standard Google box which leads you to the flight page ties general search to flight specific schedules and pricing in a way that we have not seen before. Other features such as using a map to locate flights based on a budget from your specific city and the calendar view to look at when cheap flights are available are also delivered instantaneously.

For the industry the biggest news is not the display but the links associated with the booking of these flights. For now the only booking options are the airline sites. TNOOZ quoted Googe’s take on this issue:

“Like any other partner, Google needs to honor the airlines’ distribution decisions. It has long been known in the industry that the control of pricing data and distribution of the same by airlines is tightly held. That means that we can only show airlines in the booking links.We will be exploring advertising opportunities within the page to showcase the products and services from other relevant partners, including OTA and metasearch partners. We’d also like to give users and advertisers alike the opportunity to provide feedback so that we could iterate.”

Considering the current tension between the airlines and the GDS/OTAs, this statement by Google is significant. Whether the worst fears of the OTAs and Meta-search companies are being realized (as evidenced by their heavy lobbying effort against the deal) or whether this is a temporary negotiation ploy by Google to obtain greater advertising revenue requiring the OTAs to pay for participation on this screen, is unclear. I suggest you may want to re-read my post on the Google / ITA Acquisition from April to see what else may be in the works from this deal. Certainly key to watch is the impact on mobile flight search!

Today’s announcement about the conditional approval by the U.S. Department of Justice of the acquisition by Google of ITA Software  is sending some shock waves through the travel industry. But at the end of the day what does this really mean? Here are some of  my initial  thoughts:

• General search becomes meta-search – There are very valid reasons why sites such as Kayak felt threatened by the acquisition. Google will take the ITA platform and transform general search for travel into a response that includes fares, schedules and availability, but this will likely be only the start.  It is my belief that Google will combine natural language processing, search and personalization to deliver more relevant results to what travelers are searching for,  such as ” A cheap fight for a family of 4 to Orlando that leaves on April 15th at 8:00AM” .
• Google will NOT become an OTA.  I believe Google is essentially a media company with the OTAs as one of their largest customer groups.  It is simply against the company’s best interest to actually become a seller of travel.
• Mobile will be a be part of the Google solution. With Gartner forecasting that the Android operating system will power 49% of the world’s smartphones in 2012, embedding travel search into mobile search will likely change the planning process. In  a recent presentation by Google at the TravelCom conference, the presenter stated that “86% of mobile Internet users are on the Web while watching TV”.  Siting on your couch while surfing on your tablet will become the norm.  With mobile bookings rising, embedded travel search will also accelerate the shopping process en route.
• Opening the API – I need to credit my colleague Philip Wolf with this concept, but I couldn’t agree more – Google will open up the API to ITA much in the same way they did with maps allowing a flood of third party innovation based on the ITA platform
• At the end of the day, the acquisition will impact every part of the value chain.  For example if Google/ITA were to hook into the Open Axis Group API (and the Farelogix alternative distribution platform) consumers could both access the ancillary fees missing from most travel sites today and airlines could fufill their goal of delivering more personalized tailored content from general search based on overall customer value.  Obviously this would require some sort of login
• That login may come from the ultimate social strategy from Google.  It was reported today that Google’s new CEO Larry Page, believes that Google needs to go “social” to compete. To that end, he sent out a company-wide memo last Friday, alerting employees that 25% of their annual bonus will be tied to the success or failure of Google’s social strategy in 2011. Clearly your Google login will begin tracking your social graph as Facebook does now, but not only delivering general purchase recommendations and targeted ads, but personalized travel recommendations

The next 12 months promises to be an exciting and disruptive time due to this major acquisition.