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New Search Engines Could be Nightmare
9 May 2005

In the US, fledgling brands such as Kayak and Mobissimo have launched a new type of travel search engine. The technology they are deploying could prove to be the travel industry’s ultimate nightmare as it leads the industry down the path towards greater commoditisation.

Both brands offer Web sites with sophisticated comparison shopping capabilities. For example, Mobissimo claims to search 107 travel sites. Type some flight details into its search engine and it instantly starts bringing back results from online travel agencies and airline Web sites with names of the provider and airline, flight times, number of stops and price all neatly listed.

Search for a hotel on Kayak and the site claims to be checking on over 100 online travel sites returning results that list price, hotel rating, name and address, and provider’s name. Click on the details link and you can immediately see a price comparison between the various agencies that offer the hotel as well as the hotel’s own Web site.

The emphasis is unashamedly on searching out the best price for the consumer, albeit the sites themselves word it slightly differently. As Mobissimo claims, its mission is to, “… improve the way people seek and discover travel information.”

These comparison shopping engines almost entirely subsume any brand values that travel agencies and principals have been attempting to build in the minds of the consumer. The time and effort put into designing appealing Web sites, emphasising better service, providing additional product information is simply lost if consumers visit one of these comparison shopping sites rather your own.

The technology is a further move towards a commoditised market for travel. In such a market, consumers have little regard for product features. Their assumption is that the various products on offer are homogenous enough that the only thing that matters is price. We can all recognise this happening within the flights market. As hotels, particularly the larger chains, continue to maintain consistent quality standards, this also leads to a more homogenous product. Do the brand characteristics of the chain matter to most consumers? Could the average traveller state an informed preference for a Marriot, Intercontinental or Hilton hotel or is it the price that matters?

With homogenous products and the search tools provided by companies such as Kayak and Mobissimo, consumers can search out the best deals with ease. Ultimately, this could lead to prices being driven down as travel providers seek to maintain market share and fill capacity. As prices are driven down, the least profitable business are forced to close or merge with their more efficient competitors, so reducing choice and competition. Certainly not good for the travel industry and arguably, ultimately bad for the consumer too.

In this post dotcom-boom era, it may be difficult for the likes of Kayak and Mobissimo to raise enough investment to be able to afford to buy the brand presence necessary to really drive commoditisation and consolidation across the travel industry, so perhaps we can all relax. But, just imagine the online mega-brands such as Google or Yahoo adopting this technology. Unfortunately, I don’t think it is a question of if, rather one of when. It could be the industry’s ultimate nightmare!

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