As speculated, Amazon has announced its plan to expand its travel site, Amazon Destinations to new markets in North America. It now covers 35 cities in six metropolitan regions – namely the Southeast (Atlanta), Northern California (San Francisco), Texas and the Gulf Coast (Houston) etc. The site’s tagline, which says “Hit the Road, Book local getaways” make its intentions clear to be a place to book short trips.
I did a quick search on the site for 6 nights in October. Here’s what the result shows:
Clearly it’s not a last-minute deal site, neither a full-service OTA with flight search.
The new service is still a part of Amazon Local – the daily deal website which offers flash deals and discounts in the region. In fact, Amazon Local has been offering highly discounted deals on hotels for some time now. Skift, which has been extensively covering the development, has noted – what distinguishes the Amazon Destinations from its earlier avatar is that the new version gives hotels an opportunity to sell their published rates on an ongoing basis. When I checked the website of the top listed property, the published rate is in parity with what’s being shown in Amazon Destinations. Customers can also compare prices on different dates through Amazon Calendar to get the best deal.
In sync with Amazon business model, which owns its user generated content, Amazon Destinations is letting customers post their reviews. Just like the e-commerce model, the hotel does not pay for listing, but shares a part of the payment as commission.
So is this just another channel for hotels to sell their inventories? Amazon has denied any ambition to become a serious player in the travel business. The launch of Amazon Destinations was a low key affair without any media announcement. Compared to Expedia, Priceline, TripAdvisor and Google, Amazon is a small player. However, given its heavy user traffic and extensive knowledge of customer purchasing behavior and preferences, it has all the advantages it takes to scale up quickly.
The World Travel & Tourism Council reports that Americans spent $458 billion in travel and tourism in 2014. According to a report by TechCrunch, 40% of all U.S. domestic leisure trips are short-term getaways of 1-3 nights, and many of these trips are to nearby, drivable destinations. That’s a sizable market, which Amazon is aiming at. At a time when two of the world’s biggest brands are turning serious with hotel bookings, the travel industry has to take note.