April 22, 2015
Amazon launched its hotel-booking service this week, Amazon Destinations, that will initially feature about 150 hotels, inns and B&Bs located in the Northeast, Southern California and Pacific Northwest. While the listings include a few branded hotels, the focus will remain on smaller, independent properties and operators for now. The company began hotel bookings in 2012, primarily offering discounts to address excess inventory. The new service will allow owners more flexibility regarding rates beyond package deals and discounts.
“Analysts say the move reflects Amazon’s growing interest in the lucrative travel market,” notes The Wall Street Journal. “In 2014, the travel and tourism industry generated $458 billion in the U.S. alone, according to the World Travel & Tourism Council.”
Expedia and Booking.com, currently the two biggest online agents, feature about 435,000 and 590,000 properties, respectively. The industry has been consolidating to these two (Expedia announced it would acquire Orbitz for $1.3 billion).
“Amazon, by contrast, is a bit player in the hotel-reservation market,” explains WSJ. “But some hotel owners suggested that with its heavy user traffic, the online retail giant would have certain advantages if it chose to scale up quickly.”