Google’s move this month to combine its travel-related products—including the Google Trips mobile app, Google Flights, and Google hotels search—into one landing page called Trips is a “troublesome development” for those in the online travel business, according to Wedbush Securities.
Analyst James Hardiman predicts especially choppy waters for
(ticker: TRVG). He believes it is most vulnerable to losing traffic to the
(GOOGL) division and likely to see revenue pressure. Hardiman sliced his price target on Trivago to $3.60 from $4.90 while maintaining a Neutral rating.
The news isn’t much better for fellow metasearch engine companies
(EXPE), though their resources and size give them a better chance than Trivago, Hardiman said in a note to clients on Monday.
The one-stop Trips site is dangerous on several levels, starting with an option that lets consumers go straight to the Google Hotel Ads system and bypass metasearch engines. This hurts TripAdvisor and Trivago, who have invested in Google Hotel Ads to gain traffic.
“The latest innovations by Google in the travel sector signal that the Google threat is becoming harder and harder to ignore,” Hardiman writes. “We believe, with over 1.5B (billion) active people already using Gmail, Google has a distinct advantage over its competitors in providing these relevant and helpful tools for its users.”
Google has taken several steps over the past few years to increase its presence in the online travel space. In early March, it rolled out a dedicated hotel booking website. (Previously, travelers had to start with a hotel-related query in Google search before reaching its Hotels search widget). In May, Google rolled out vacation rentals to its hotel search engine.
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