Consumers preparing to go on vacation might peruse Amazon for the necessities: sunscreen, rafts, hiking backpacks –– you name it and the online retailer probably has it. Unless, of course, you were looking to book your lodging. But that’s about to change now that the e-tailer is reportedly gearing up to launch its own hotel-booking service that would compete with the likes of TripAdvisor and Booking.com..
Skift reports that Amazon is poised to launch Amazon Travel, a site dedicated to booking at independent hotels and resorts near major cities, around January 1.
The site’s initial rollout will reportedly feature a selection of hotels within a few hours of New York City, Los Angeles, and Seattle.
Citing representatives of three independent hotels, Skift reports that Amazon’s aim with the new service is to create a marketplace for independent and boutique hotels that might not have the marketing power afforded to larger chains or online travel agencies.
Amazon did not respond to Skift’s request for comment on the new venture.
Of the hotels that Skift spoke with, two had already signed on with Amazon, while the third was giving the proposition “heavy consideration.”
According to the hoteliers, properties would load their room types, availability, pricing information, and photos into an Amazon extranet and would pay a standard 15% commission to Amazon for the prepaid bookings.
When a consumers decides to book with the hotel, Amazon sends the property an email notification and the hotels update their calendar on the extranet.
The properties would receive their payments from Amazon for the booked stays in two installments and could attempt to negotiate a lower commission rate, Skift reports.
One hotelier tells Skift that Amazon used TripAdvisor ratings as part of their criteria for selecting properties to participate in the new service. He says the e-tailer would only use a few properties per destination and those hotels would have to be rated four stars or above.
So far, it appears that Amazon Travel would only be focusing on hotels, but could eventually add flights and other travel accommodations.
A hotelier that already signed on to the service, says they were persuaded to do so by Amazon’s enormous customer base.
While Amazon Travel might offer similar hotel options to other travel sites like Booking.com, Skift reports that Amazon’s model is significantly different.
Although both sites would use an agency/commission model, Amazon appears to be starting with prepaid bookings. Booking.com generally offers a pay-at-the-hotel model for consumers.
For that reason and the fact that one hotelier said they would have to wait for two payments from Amazon, Skift envisions it could be difficult to persuade hoteliers to join the new service.
However, by targeting a large niche market – independent and boutique hotels – Amazon is setting itself apart from the competition which largely focuses on large chain properties.
Robert Cole, a hotel consultant with RockCheeta, tells Skift that Amazon’s presence in the hotel market will likely shake things up.
“A key will be if Amazon can create a great user experience and drive traffic,” he says. “Travel is a big global market without shipping/logistics costs. Thinking special Amazon Prime deals are a no-brainer when running at scale”
Skift reports this isn’t Amazon’s first time entering the travel market. In 2001 and 2006 the company partnered with Expedia and SideStep, respectively. In the partnership with SideStep, the company created an Amazon travel store offering flight, hotel, car and vacation package searches.
Exclusive: Amazon to Get Into Hotel Booking With Launch of Travel Site [Skift]
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