Before I begin, I must admit my obsession with Google and its products, especially those with the trademark ‘beta’ tag attached to it. From the initial rollout of Gmail to Labs, Google Earth, Google Wave and most recently Buzz, I’ve always been captivated by anything new rolling out of 1600 Amphitheatre Parkway.

This is why I am so excited by their strategy to finally make inroads in the travel industry by displaying hotel prices on Google Maps. By now we are all aware that the displayed hotel prices will merely be sponsored listings and Google will continue to earn revenues through its traditional model. However in the long-term, this strategy could be nothing short of a revolution for the travel industry and a win-win situation for users because Google believes:

“By showing you this relevant hotel rate information directly in the Google Maps results panel we hope to make this aspect of your trip planning more speedy and efficient – so you can get where you’re going and enjoy your travel destination!”

While the search engine giant is currently working with select advertisers, the industry must pull its socks up for the storm that is brewing in the online travel industry.

Picture this: At present, Google is working with select online travel agencies (OTAs) in displaying the sponsored results. As the model receives favorable traction, it won’t be surprising to see direct suppliers featured alongside OTAs in the listings. Provided this happens, one could witness yet another round of price wars leading to further transparency in the way this industry deals with prices.

It doesn’t stop there. In the long-term, as more advertisers attempt to topple each other and find themselves in the sponsored results, multiple prices could trigger a revolution by featuring real-time prices in search results! Until now, sponsored results have displayed passive prices and real-time prices would mean a high-level of integration with hotel’s inventory available across the distribution chain.

Microsoft aggregated travel in the mid-90s to give birth to Expedia, now the biggest online travel Web site in the world. Similarly, Google could compel travelers to search for hotels on its Web site by displaying real-time prices and differentiating from its competitors, especially Bing, which already features sponsored price results for hotels. Doing this, however, will be an uphill task and the model’s success lies in offering precise information, i.e., real-time prices. Neither Google nor advertisers would want passive information being displayed; and therefore, integration of these aspects will be crucial in terms of user-adaptability in the short-term.

Google is known for tweaking its ‘beta’ products until perfection. It has been working on real-time communication channels for quite some time and Google Wave is a rich testament of that. But unlike Wave, which many users have failed to adopt, Search and Maps have among the highest degree of adoption across the Google portfolio. By bridging these two channels with sponsored results, Google’s clearly on a path to monetize its Maps and related location-based services in a big way.

The success of this model could further pave the road for Google to roll out sponsored price functionality in its regular search results, therefore allowing it to cash in on other sectors of the travel industry, including cruises, car rentals and perhaps even air travel! Similarly, there is tremendous opportunity in monetizing advertising for local tours, events, and in-destination services – a highly fragmented segment of the industry.

On a futuristic note, one may also witness this model integrated into Google Goggles. Imagine getting sponsored price results of hotels in a particular locality by simply taking a picture of a street-sign, something similar, but a lot simpler than the highly popular iPhone app in Japan, Sekai Camera.

And finally, after all the brouhaha about displaying hotel prices in Google Maps it makes me wonder: If it was just a matter of displaying sponsored results, why did Google wait for so long?

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