In Part I of a new monthly column Hot Hotels chairman Joe Haslam talked about the industry’s fascination with Google’s mysterious and elusive approach. Now he wonders if startups are the new patents

An obvious strategy for Google is to become the biggest metasearch company in the world by deeply integrating travel components using their 500-million user services gmail, maps and search. No wonder Concur have set up a venture capital fund called ‘The Perfect Trip’ and TripAdvisor are on an acquisition spree. They see that startups are the new patents, the only way to defend against Google’s increasing travel footprint.

The risk for Google, and undoubtedly the reason for their caution, is that a move into fulfilment brings them into direct competition with some of their biggest customers. Travel is among the biggest categories in paid search after financial products and general retail. One estimate is that in 2012, Priceline spent $1.14 billion on paid search with Google (2.6% of the search giants total revenue). In the US, Expedia spends more on paid search than any of their competitors, more even the global leader Booking.com. So well are Google benefiting from the marketing war between Priceline and Expedia that the temptation must be just to let the money roll in and not to rock the boat. This is not at all unusual in the software business where it is common to have a ‘frenemy’, that is someone with whom you compete as well as cooperate.

When Sequoia Capital, one the oldest and most respected venture capital firms in Silicon Valley invested in Skyscanner in October 2013, Sir Michael Moritz made the point that much remains to be done to make mobile and online travel easier for consumers from Accra to Zagreb. He went on to say that in 2033, when someone surveys the universe of online travel companies, 2013 will seem like very early days. For Moritz, the travel business is old, conservative and fragmented, an industry still attached to a glamorous past at the expense of delivering real innovation for customers.

Certainly the startups are coming. So many, in fact, that Mike Butcher, the European Editor of Techcrunch, wrote in 2011: “If I have to see another startup which wants to aggregate travel experiences I will gnaw my right leg off”.

Jokes aside, though, Butcher made an important point that these new travel startups weren’t thinking big enough, especially when there is an obvious problem to solve and a big market to win.

We are not quite at the Google versus everyone else stage in travel but it wouldn’t take too much else to get there. Exactly how much of the travel business they can capture is unclear but if you subscribe to the theory of the American entrepreneur, investor and software engineer, Marc Andreesson, that ‘software is eating the world’ then its not impossible Google could one day reach as much as 50%.

If we remember that the overall size of the travel business is estimated to be 9% of Global GDP then we are talking trillions not billions. So maybe those of us who are getting excited about the ‘disruptive innovation’ potential of Uber and Airbnb are focusing too narrowly. Indeed, some people already argue these startup business models are already in trouble. With the ubiquity of Google though, it can hide in plain sight adding share all the time, almost unnoticed.

The scare the pants off them presentation is not totally wrong; a startup can still emerge that can threaten your business so for sure you must continue to monitor that. But in travel, in 2014, the name to watch is the one with 50,000 employees and $60 billion in revenue. Look at Google as your ‘frenemy’ and startups as your defence, not your threat.

Joe Haslam is chairman of Hot Hotels, a same day, mobile only hotel booking App based in Spain. See hot.co.uk or follow on Twitter at @hot_app