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 thehotel 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.
– extract from Xotels article 24 dec 2014