Alex Bainbridge wrote an article Monday pondering whether intermediaries are even necessary in a Google/ITA dominated travel sector. It’s a fair question, especially given the redundant layer that many of the meta-search/comparison sites play, simply to help direct traffic.
But I think Alex’s notion of a 2-layered travel industry (Google –> Supplier) is maybe one step too thin. As we’ve learned (or should have) from last year’s Ash Cloud or this past Christmas’ “Snowmaggedon”, or even the snow storm that’s hitting the East Coast as we speak that reportedly led to the cancellation of over 330 flights at Hartsfield-Jackson Atlanta International Monday and 1,400 more yesterday, things go wrong fairly often in travel and sometimes catastrophically. And when it does, intermediaries specifically travel agents, can be pretty important.
In a 2-layer model we can count on two things:
- Google won’t be there to help. Google is definitely not in the service business. Self-service, maybe. But they won’t have people man the phones and likely won’t be the ones booking the actual ticket – they’ll pass those transactions right to the supplier and have them be the vendor of record.
- The suppliers won’t be all that prepared to react either. In their drive to reduce costs, travel suppliers (and we’re probably talking airlines primarily in this context) have been aggressively reducing headcount in the service side of the business to lower costs. So will they equipped to deal with an increased number of calls if more transactions are booked directly with them? As they are driving to reduce base flight costs, will they want to deal with higher service costs?
So perhaps a 3-tiered model is still important, maybe even more so, in a Google travel world.
What’s your POV? Comments welcome.