The news hit the stands 2 days ago, Google has purchased travel software developer ITA, but what most didn’t mention was the timing coinciding with Dubai opening it’s new massive airport Dubai World Central – Al Maktoum International only 2 days earlier.
The Middle East and Northern Africa region has been witnessing rapid expansion in terms of flight traffic over the past 10 years, cultivating a whopping 41 million passengers passing through Dubai International airport alone during 2009.
These numbers are expected to increase over the next 10-20 years in Dubai as well as in the rest of the MENA region, which presents an interesting opportunity for the services and of course, online travel industry.
Google has been dabbling with flight results for a while now, but by purchasing ITA, it’s got its hands on a very rich software platform, and client roster to go with it.
Considering the implications it could have on the travel world in general and MENA region in particular we contacted e-Travel/Tourism expert Hichame Assi Head of Strategy for HotelsCombined.com, former General Manager of OctopusTravel.com Australia/New Zealand.
[Disclaimer:Hichame is also my personal friend & mentor]
What kind of implications do you think this will have on the online travel industry?
In my personal opinion airlines will benefit from the increase in direct business and the dis-intermediation (by Google obliterating the middle-man Online Travel Agencies).OTAs will be upset because they will be in direct competition with Google who they also use as a key distribution channel.
Those OTAs who actually use ITA software will be screwed twice over, as they’ll be paying google for the click (PPC), and a fee for the search generated by the user on their ITA integration. Obviously flight metasearch companies like Kayak have the most to lose.
Here in the Middle East it has been said time and again, that the online travel industry has yet to be fully covered, with small time operations starting here and there such as Sharjah based Musafir.com and Saudi Arabia based Flyin.com both providing Arab centric lookup services for flights and hotels. Major players have yet to realize or exploit the full potential of this booming market.
Since, as most observers and MENA dwellers are aware, Google doesn’t normally put our region on the top of it’s priorities – heck it still hasn’t placed Google search result pagination properly from right to left on the Arabic Google search results page! – but could the timing of this deal mean Google is eying the region for possible expansion into a market that is basically raw, with massive potential for growth?
We asked Hichame what he thought about that and here’s what he had to say:
I don’t think it’ll impact the Middle Eastern e-travel market for a couple of years, as there are no real Arabic Flight Comparison tools that tap into and compare the main MENA carriers… and the majority of MENA only use travel sites for research and then book over the phone or at their local travel agent.
It’s almost as if this deal, if Google does extend the resulting integration to MENA it might actually allow MENA to skip the phase of OTA dominance (like Expedia, Travelocity, LastMinute.com…etc. in US and Europe).
Which we totally agree with, moreover, considering the fact we do have this underdeveloped industry with a couple of years to spare at best. It might be a good time for some companies to jump in and establish itself before Google decides to take over a market competitors Bing Travel and Kayak have failed to fully embrace.