May 2019, London
Europe's biggest event for commercial and digital travel execs
Amazon: threat and prime opportunity for travel
EyeforTravel has released a new white paper that explores the changing face of hotel distribution
Amazon has not suceeded with the travel industry, yet, but if it does it will be a "monster with a lot of data", says Maite Aguilar NH Hotels VP of Distribution, NH Hotels, in EyeforTravel’s latest white paper – Dirty Distribution Tactics and how Hotels are Fighting Back.
Amazon last made an attempt to offer hotel booking and discounted hotel deals back in 2015, but withdrew without too much fuss. Clearly, selling travel is not quite the same as retail. But that is not to say it won’t. In 2018, the online retail company had 100 million subscription-based prime customers. So, by all accounts, it has captive audience for travel products and services, a fact that has not been missed by the investment community or, for that matter, the travel industry.
From a hotel industry perspective, Inderpreet Banga, Senior Director, eDistribution and Wholesale, Wyndham Hotels & Resorts, who was interviewed for the white paper, has this to say: “Considering that Amazon’s search traffic and market share continues to rise, it could acquire inventory from all travel providers and create its own marketplace/metasearch type platform.”
Considering that Amazon’s search traffic and market share continues to rise, it could acquire inventory from all travel providers and create its own marketplace/metasearch type platform
Already hotels are struggling to cope with the growing number of distribution channels that are not always playing responsibly. Among the challenges, addressed in the white paper, are the practice of onward distribution, the blurring of OTA and wholesale channels and defensive pricing tactics. Increasingly, costs of acquisition are rising and hotels understand that they need to fight back.
So, what would it mean if Amazon entered the fray? Hoteliers argue that it could expose issues in the market place, especially for those companies that do not have a handle on pricing and inventory.
According to Banga, “Amazon could go the direction of exclusive rates such as Google has done with their Google One programme. They source discounted inventory from various distributors that undercut the market using the Google ‘closed user group’. I think this is why inventory control is so important and those distributors that do not abide by the terms of the agreements will be turned off or penalised.”
Speaking of technology giants, the white paper also explores where hotels are redirecting their marketing budgets. Highgate Hotels, for example, has scaled back PPC spend by a third over the past two years. “We can’t compete with the OTAs, and it simply doesn’t work,” says Gopakumar Menon, VP – Distribution & Revenue Management, Highgate Hotels.
In Highgate’s case, spend is being redirected into Google, and also Facebook and Instagram which, from an advertising perspective, according to Menon, are more effective channels. Google’s Hotel Paid Ads is proving to be particularly effective.
The full white paper is packed with insight and tips from leading brands including Rough Guides, Highgate Hotels, NH Hotels, Wyndham Hotels & Resorts, Civitatis and CarTrawler