Amazon Shakes Up the Travel Industry

Xola Team
Xola Team
Share on
Amazon Shakes Up the Travel Industry

Amazon Launches Travel Site Starting With Hotel Bookings

Just when we thought Viator had really caused a stir, Amazon steals its limelight, its thunder–pretty much everything but its kitchen sink.

Yesterday, Skift reported that the e-commerce giant is launching Amazon Travel. It will start by partnering with independent hotels and resorts in the New York, Los Angeles, and Seattle metropolitan areas. In doing so, Amazon will enter the Online Travel Agent (OTA) space with other players like Expedia or Booking.com. Hotel partners would load their room types, availability, pricing information, and photos into an Amazon extranet and commissions would start at 15% on the prepaid bookings (with room for negotiations).

Why would businesses partner with the newcomer when there are already so many established companies that sell hotel inventory? One hotelier quoted in Skift says it all in one breath: “It’s Amazon.com.” Amazon sells to 244 million active customers on its site, a customer base that would make any business see dollar signs.

Amazon

Should Viator and others be worried?

Amazon’s push into hotel bookings makes me wonder, how long before it starts reselling tours and activities? With a corporate giant that’s also beloved by hordes of loyal customers, it seems that wherever Amazon goes, revenue is sure to follow. What would happen to platforms like Viator, Groupon, or GetYourGuide if they eventually have to compete with Amazon?

Amazon wields a considerable advantage because of how much “Big Data” it commands. Based on people’s search history and purchases, it can suggest that, along with their hotel reservation, travelers buy a GoPro or sunglasses for their trip to Los Angeles.

Only Time Will Tell

While the name Amazon alone commands headlines, it’s still too early to tell how this venture might develop. Despite having deep pockets and a trusted brand, Amazon’s travel platform model might not be the most technologically or economically convenient. As opposed to Booking.com where travelers pay at the hotel for their reservation, on Amazon, everything would be pre-booked. Amazon plans to pay out its business partners in two installments, which could be a major barrier for smaller establishments with sensitive cash flows.

The big question is whether Amazon is spreading itself too thin by taking on travel. Can it measure up against competitors who focus exclusively on this industry, and not on all the other products Amazon also retails? One thing’s for sure, it’s an exciting time to be in the travel industry.

·

Writer Xola Team

Xola Team

Related Articles

What will ChatGPT mean for the travel industry? 
Industry News

What will ChatGPT mean for the travel industry? 

By now you’ve probably heard of ChatGPT — and if you haven’t, here’s a quick primer: Launched on November 30

Learn More
14 Tweetable Facts About the Zip Line Industry
Business Operations

14 Tweetable Facts About the Zip Line Industry

On Xola University, we have published extensively about the importance of TripAdvisor, Facebook, and Google+ for your zip line business. But what do you do when it comes to Twitter? Twitter can be used as an effective tool to spread your brand’s awareness, 140 characters at a time. It turns out that there is very little reliable information regarding the zip line industry available online, so you could stand a lot to gain by helping fill this void. In this article, we will be giving you interesting facts about zip lines around the world that you can take and tailor for your specific tour.

Learn More
The Average Escape Room Business: Rooms, Revenue, and Bookings
Business Operations

The Average Escape Room Business: Rooms, Revenue, and Bookings

At Xola we crunched the numbers to help escape room startups and seasoned owners better understand revenue expectations and consumer behavior. According to our research, the average escape room in the United States has 3 games per location and generates...

Learn More