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TechAir Travel

Google is throwing its weight into the travel industry: It just launched new bargain-hunting services and a flight price guarantee

Eleanor Pringle
By
Eleanor Pringle
Eleanor Pringle
Senior Reporter, Economics and Markets
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Eleanor Pringle
By
Eleanor Pringle
Eleanor Pringle
Senior Reporter, Economics and Markets
Down Arrow Button Icon
April 4, 2023, 7:03 AM ET
A tourist stands smiling on an airport escalator
Google is so confident in its algorithm it'll give customers money back if prices are a better bargain.Anucha Songsap / EyeEm - Getty Images

Google’s taking on the travel industry just in time for peak booking season. The Alphabet-owned behemoth has announced a raft of new services designed to help users find bargains this summer, including the introduction of its first-ever flight price guarantee.

Travelers seem likely to be most drawn to this last service, which piggybacks on one already offered by Google Flights that shows users whether the current price a flight is low, typical, or high when compared to historic averages. This helps buyers decide whether they should purchase a flight or wait.

The new flight price guarantee will add a badge alongside flights that Google is confident won’t get any cheaper before the plane takes off—if a guaranteed flight does sink to a lower price after a traveler buys, the difference between the prices will be returned to the customer via Google Pay.

“No one likes to feel buyer’s remorse, and that’s especially true for a big purchase like plane tickets where the prices change from day to day,” Richard Holden, Google’s VP of travel, said in a blog post announcing the new features.

To start, the new guarantee is a pilot scheme only for U.S. flights, which have seen price hikes and declining service. Across the U.S. airline prices have risen by around 26% in the past year, according to the U.S. Bureau of Labor Statistics, while in recent years, the number of complaints nearly quadrupled. Meanwhile, Delta has been so overwhelmed with a boom in demand for its airport lounges it had to bar its own staff because of overcrowding.

There are a few stipulations to the guarantee: The flights can only be booked by U.S. residents, paid in dollars, and be for flights departing from the States. The tickets must also be booked via Google, and the guarantee may be voided if carriers update prices before the search engine’s algorithm has time to catch up.

Google’s move may have come just in time for tourists looking to tighten their purse strings, as new data from Bloomberg discovered that 18% of high-earning tourists want to scale back their summer holiday spend this year.

Hotel room hack

Data also showed that top earners want to spend less on hotel rooms—$500 or less per night—which Google’s new launches may also come in handy for.

It has launched a new “swipeable story format,” similar to user experiences from the likes of Instagram and YouTube. As users search for a hotel in a certain city, they can tap through photos of the venue before swiping down to bring up the next property.

Reviews from previous guests accompany the photo slider, as well as the price at the bottom of the screen, though no feature has been launched akin to the Google Flights algorithm to compare the figure to historic prices.

Google, which has also been heavily focussed on its A.I. offering in 2023, also announced similar comparison abilities for tourist attractions, listing not only the official site of a destination but also rates of other ticket providers, and booking links.

Why are room prices going up?

According to research from real estate experts CoStar conducted in November 2022, luxury room rates were 38.4% higher in April 2022 compared to April of 2019. Tom Marchant, cofounder of luxury travel company Black Tomato, told Fortune that this rise has come about because many hotel companies are still trying to claw back the huge losses from the pandemic.

He added businesses are also struggling to retain staff, resulting in an imbalance in some venues of service quality and prices: “After the pandemic, we have seen a large increase in demand for truly out-of-this-world experience-based travel, especially as it pertains to our multigenerational family market, which has grown considerably in recent years.”

Marchant added that, contrary to Bloomberg’s data, average booking spend with his U.K-based company has gone up from $26,500 to $43,400 with many popular destinations already booking up.

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About the Author
Eleanor Pringle
By Eleanor PringleSenior Reporter, Economics and Markets
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Eleanor Pringle is an award-winning senior reporter at Fortune covering news, the economy, and personal finance. Eleanor previously worked as a business correspondent and news editor in regional news in the U.K. She completed her journalism training with the Press Association after earning a degree from the University of East Anglia.

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