New player enters Online Travel Business – What to expect from Amazon’s new Hotel Bookings Service?

Heading for new shores…

With the launch of their new online hotel bookings service Amazon Destinations, the world’s biggest online retailer has entered the online travel business. Amazon Destinations, part of the Amazon Local site, is looking to capture the niche market of short-term local getaways. Clever as always, Amazon has chosen to venture into an area which, up till now, has been largely overlooked by its competing booking sites. A choice all the more clever considering the current travel trends, with their emphasis on authenticity and adventure travel.

Their new venture is all over the news, but so far, Amazon Destinations is focused solely on travellers in the United States and only offers hotel breaks in the Pacific Northwest, California and the Northeast. Most of the 150 hotels currently listed on Amazon Destinations are in close proximity to New York, Los Angeles and Amazons company base, Seattle. The product focuses on independent properties, with some larger brand names here and there.

To date, Amazon has kept quiet about whether or not – not to mention how much – commission they would charge Hotels for rooms booked through their service. But since an Amazon spokesman described the service as “competitive” with such Online Travel Agents as Expedia.com and Booking.com, it is to be assumed that commission rates will be between 10% and 25%.

Additional competition – a chance for hotels?

With the rising distribution costs charged by the main Online Travel Agents, hoteliers are desperate to lead customers directly to their websites for commission-free direct bookings. And while it becomes increasingly important that hotels regain their independence from the Online Travel Agents in the long-run, a first step towards a detachment might be made now. (Find out why it is so important for hotels to stay independent. Click here to read our Blogpost about the implications of Booking.com’s anonymization of guest email addresses!)

Numerous hotels have voiced their approval of Amazon’s new online hotel bookings service. Because let’s face it, Expedia and Priceline’s Booking have only strengthened their position of monopoly in recent years and will undoubtedly keep growing in the near future. Adding competition will stir up the market and hoteliers are hoping to eventually get more for the commission they are paying.

What do you think? Do you agree that the current Online Travel Agents position of monopoly damages the hospitality industry? And do you welcome Amazon’s new hotel booking service as long needed competition?

– All questions that will surely keep the industry talking in the future!

While a competitive market for Online Travel Agents is invaluable for the hotelier, becoming independent from those external booking portals is equally important.
This is why Customer Alliance is launching Booked – our very own booking engine, designed to help hoteliers more easily convert website visits into commission-free direct bookings with an integrated Booking Widget.

Be courageous like Amazon, and sign up for our exclusive Booked Beta Test here: