eCommerce Giants Entering into the Hotel Distribution Landscape
In case you missed it, Amazon, the biggest ecommerce website in the world, has entered into the hotel distribution game. They have recently started contracting hotels in the United States. Are we looking at a shake-up of the domination of the hotel distribution landscape by a few big global players?
Amazon’s sales teams have started approaching hotels within driving distance of New York, Los Angeles and Seattle. Hotels who sign up now, are offered a lower commission rate than the ones who wait to incentivize early adaptors. Upon reaching out to Amazon I was informed that at this time they are only sourcing US hotels, and international product is not yet on the radar.
Update: UK hotels also being approached ...
Let’s see what will happen in the New Year when Amazon launches their hotel booking service. Hopefully this will disrupt the hotel distribution landscape and shift the balance away from powerhouses like Priceline (Booking, Kayak, Agoda, Priceline, etc), Expedia (Expedia, Hotels.com, Venere, Trivago, etc) and TripAdvisor.
More competition could lead to a put pressure on the control the big players have o the market, and hopefully help curtail distribution costs, which have been rising faster than revenues over the last years. Amazon seems to be starting off with the merchant model by the likes of Expedia and Hotels.com, but with a considerably lower margin of 15%. There is also mention that Amazon will invoice the hotel for commission, following the model of Booking.com.
If Amazon gets it right we might be looking at a game changer in the hotel distribution landscape.
That said, what’s next? eBay?
eBay another of world largest ecommerce websites has actually been in the hotel booking game for a bit longer. But it has never gone main stream. It has been offering hotel vouchers for through the Cultuzz platform.
Vouchers however at a fixed rate, is simply not the most popular with hotels in the day an age of dynamic pricing. Nor is travel prominently featured on their website. Will they step it up as well now?
Just thinking out loud: ‘With their store in store principle, eBay could make a great candidate to enter into the meta-search game, allowing hotels and OTA to compete on price to gain bookings.’
Looking at other large shopping websites, I can’t help it but wonder who else will be entering into this high transaction value business next year … BustBuy.com, Wallmart.com, Target.com, Macys.com, Costco.com? And let’s not forget Apple and Google of course ...
I am looking forward to a bit of disruption in the hotel distribution landscape in 2015.
Patrick Landman @ Xotels