Is Amazon the 'elephant in the (hotel) room'?
The Amazon / ClearTrip partnership is far from a revolution, but it's another tiny step Bezos' company took into the travel space. I think the time has come to address the elephant in the room: acquisitions. Rather than building from the ground up and launching its own products (remember the 2014' AMZ Travel fiasco?), in fact, the company now seems to prefer a different approach, partnership with existing providers. So why not acquiring them tout court? It's intriguing to speculate on who can be on Bezos' radar: trivago? Cheap but, honestly, what would be the added value? TripAdvisor? Mew. My two cents are on Expedia. Most of the OTA's infrastructures are already in AWS anyway, and -even though expensive- that's an investment Amazon can undoubtedly support. According to analyst Brian Nowak, our industry has -so far- "proven to be immune" from the e-commerce giant but, he continues, the annual profit figure of Amazon Travel could be estimated in over half a billion dollars. Juicy.
Travel Tech Journalist | Published Author | Consultant
A study by OAG revealed that 44% of travelers would gladly book on Amazon. However, after the local.amazon.com experiment, Bezos' company stayed relatively quiet in the industry. At least on the surface: amongst other things, it signed an agreement with Meliá Hotels International, closed a deal with ClearTrip, and led a $500M funding round for Deliveroo. The trend seems pretty clear: AMZ is slowly dropping the idea to create a proprietary ecosystem, preferring to partner, invest or buy other companies. Now the question is: which one(s)?
1. Expedia stock value dropped from over $150 to $110 in one year and, with 1:14 stock ratio, the acquisition would give Bezos the technology and know-how necessary to compete with Google.
2. Trivago is another possible, inexpensive, choice: last June, the German metasearch engine was worth over three times its current value.
3. TripAdvisor may have found a new youth with the new feed-based design, but it is still worth half of what it used to be 4 years ago and could be another easy pick.
All those investments would be possible for a company with a capitalization of >$1,000B. Moreover, don't forget that AMZ recently opened (and, suddenly, closed) a position for a Head of Marketing Hospitality and Travel "to develop, lead, and execute AWS' global marketing strategy", revealing its interest in the industry.