World Panel
Viewpoint21 June 2019

Is Amazon the 'elephant in the (hotel) room'?

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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.

This viewpoint was created by
Simone Puorto , Travel Tech Journalist | Published Author | Consultant
Osvaldo Mauro
Entrepreneur & Business Developer

Speculating about a significant entrance of Amazon in travel it's the gossip of the year, but some real points can be analysed. Amazon is quite active in the travel space already. In 2017 they hired as head of travel business dev. of AWS, my acquaintance Mr Morin which previously was one of the top persons of Google in travel products such as Flight and Hotel Ads. He comes from Ita Software (acquired by Google in 2010) which tells a lot about the kernel technical approach that a leader like this can bring to a company.

It could be a consequence of the fact that in 2014 - 2015, Amazon lightly scraped itself in the attempt to sell hotel products via local prepaid vouchers. They probably realised that contracting (one by one) and distributing massive hotel inventory at 15% commission is pretty tough kind of e-commerce. Nowadays, Amazon has significant partnerships with major chains regarding their Alexa for Hospitality. Their voice assistant has a hotel version used by most prestigious brands.

Apart from its flights reselling white-label site in India, Amazon has more core travel-tech running under the hood. The Alexa AI massive presence and its power to suggest (inspiration sounds like experiences to me) could be a considerable advantage in the b2c travel sales funnel. Aws, the web services farm of Amazon, hosts thousands of travel companies core technology. Most of these are in the aviation sector, including partnerships with Iata, but also among OTAs like Expedia. In hospitality with players such as Choice Hotels, to cite few names that mention Amazon Web Services in their press releases.

Aws Travel is a scalable and affordable resource also for startups. Hopper to quote a very big one or our new project Profiter.ai to say a newcomer. Despite all this guessing, a prestigious investors analysis by CB Insights named "The 7 Industries Amazon Could Disrupt Next" explores all the possible scenarios deeply, for next years and travel it's not there. 

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