The ongoing COVID-19 pandemic has had a serious impact on online travel agencies (OTAs), according to data and analytics company, GlobalData, which notes that the OTA market value decreased by 60,4% year-on-year in 2020.
This strain has amplified OTAs’ existing concerns about the growing presence of Google in the market, and how the tech giant’s control could impact competitiveness and therefore consumer choice.
“Google’s growing presence in online travel will be ominous for OTAs that have no choice but to rely on the search engine for web traffic,” explains Ralph Hollister, Travel and Tourism Analyst at GlobalData. “Regulators are starting to control Google’s practices, but the company has to be treated differently due to its position as a dominant search engine, as well as the fact that it is not offering directly competing services.”
From 2015 to 2019, the OTA market was seeing growth of 9,4% compound annual growth rate, reaching US$480,3bn. This rapid growth rate and future growth potential intensified Google’s focus on online travel.
However, by 2019, the OTA market was already blaming weakened visibility in Google search results for poor Q3 earnings.
“Google really ramped up its activity in online travel prior to the pandemic. When looking at 2019 alone, Google launched its Travel Hub, added flight check-in and hotel booking abilities to Google Assistant, attached lodging listings to its Maps function, created a search site for hotel availability by destination, and Alphabet [Google’s parent company] even launched its own ride-hailing app,” Hollister adds.
