Integrated local search capability is the next horizon in the online travel space, and you can bet your bottom dollar that Google and Apple are examining the how, what, when, and where of its implementation.
In a dialog with Travel Weekly PLUS Editor in Chief Diane Merlino, travel tech expert Norm Rose, president of Travel Tech Consulting Inc. and a senior technology analyst with PhoCusWright Inc., talks about what’s brewing and what impact it will have on the travel industry. This is part three of an exclusive Travel Weekly PLUS Special Report on Google versus Apple in the travel space.
Merlino: Norm, you've talked a lot about local search and the role it plays in the involvement of Apple and Google in the travel space. How important is local search in the overall picture?
Rose: Take a look at the Delta [Air Lines] iPad app. The thing that is really fascinating about it is they basically shift content based on which part of the journey you're on. So, once you land at a place, the emphasis of the app is on local discovery.
The thing that hasn't been done well is to integrate real-time information around festivals and activities and so forth with actual activity provider information. Someone has an opportunity to do that, and it may end up being Google, or it may end up being Apple.
Merlino: What might integrated local search look like?
Rose: Information on things like where I can rent a bike, where I can get a city tour, with relevancy based on my preferences in some type of crowd-sourcing element and some type of social media element.
People have been touching all these pieces of the travel process, but that information is still pretty disparate and exists in different places online. DMOs may have the best information on festivals right now. Trip Advisor or Yelp may have the best crowd sourcing information as far as reviews. Facebook or another social media platform may have the best information on personal preferences.
There are lots of disparate elements out there that can be integrated to make local search a lot more valuable. It's just how do you discover this stuff? And that's part of the search paradigm.
Merlino: That would be squarely in Google’s wheelhouse.
Rose: I think it's clear from the assets Google has purchased that that's where they're heading. They're trying to create that.
Apple is likely thinking about it as well. Apple's not a search company. Apple is a personal technology and user interface company; they want to make life easier. But part of making life easier in a specific location is to give you the right information at the right time in context, based on your preferences and the immediate need of what you're looking to do. So I think they'll get involved with this as well.
Merlino: How could the development of integrated local search capability affect travel suppliers? Do you anticipate partnerships with Google or Apple?
Rose: Definitely. I don't think Google or Apple can do everything they want to do by themselves. They may acquire some companies to help them do this, but there is absolutely an opportunity for partnerships, maybe with OTAs, maybe with other entities.
We could also have alternative ecosystems based around airline alliances or around hotels. I’ve been really strong on this lately. What if an airline alliance became so strong that you could actually have a Star Alliance app or a OneWorld app on your phone that helps you 
navigate between the different partners, and the app gives you additional information, kind of like what Delta is doing right now on their tablet app?
But there's something about these ecosystems. When was the last time you played something in iTunes on your Google Android phone? It’s not too easy, right? In fact, you can’t do it. Now you can play an Amazon video on an Apple product, but if you want to buy that video you have to go to Amazon.
What’s happening with these ecosystems is they are delivering specific content that only operates within that ecosystem. So if an airline alliance does that, or if a hotel group that now has everything from a budget hotel to a five-star hotel does that, it could complete or complement what we were talking about with the other parts.
Merlino: So neither Apple nor Google is positioning to take over the online travel space?
Rose: No matter what role we think these two companies are going to play in travel, they're not suddenly going to be these vertically integrated entities that own everything from a hotel and a charter aircraft to a retail outlet to sell you those things. That’s not where these guys are moving, so there have to be partnerships.
The fact that so many airlines across the globe have embraced [Apple’s] Passbook makes it clear that they are saying, “Hey, Passbook's an easier way.” If you have ever tried to use electronic boarding passes, there is all this fumbling around, but once it's in Passbook you don’t have to fumble anymore. That’s why it’s attractive for airlines to use Passbook. It was an innovation from Apple to make things easier. That's what they do. They try to make human-computer interfaces easier.
Merlino: That’s an example of cooperation. What about competition from travel supplier ecosystems that could give Google or Apple a run for their money?
Rose: There is plenty of opportunity for competition that suppliers could initiate based on their relationships and their brand depth. There are also opportunities to partner with Apple and Google because these companies don’t own hotels, they don't have relationships with the airports. iTravel is very contingent upon infrastructure, so it's an interesting environment that will need a certain amount of cooperation.
But what everybody is afraid of is the competitive media model; they're going to be charged an extra piece for being positioned in that OS button. That’s probably warranted, and travel suppliers need to be concerned.
They should have been concerned about OTAs. Now you have the Room Key effort by hoteliers because they need a direct alternative to their hotels being sold by OTAs. Well, it's a little late; they should have built that in the first place some years ago.
Merlino: That’s a strong cautionary note.
Rose: We're in an environment in the travel industry, particularly with suppliers, where there are some very, very thin margins, especially for the airlines. They get blamed for everything, including weather. They’ve got so much on their plates trying to be profitable and to improve service that sometimes they have blinders on, and it's hard for them to realize that the emerging technology platforms they like so much — like Passbook — can turn into a competitive threat because they’re going to demand money as part of a distribution channel.
That’s the fear everyone has. I always talk about the future, but I have no guarantee of anything. But this is something that should be of concern. Maybe the way to counter that is for suppliers to be proactive in developing their own ecosystems.
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