Jan202015

Will Amazon challenge Expedia and Priceline for hotel bookings?

EyeforTravel.com published an article yesterday, Amazon’s online travel march continues and enviable lessons in how to do it from Japan, on the potential for Amazon.com to expand into the online hotel booking market with a proposition hotels may favor over Expedia and Priceline. Web buzz suggests Amazon could have a major impact in the online hotel booking space by taking commissions of 15% or less compared to 25% to 30% common for Expedia and Priceline sites. From the consumer viewpoint, Amazon Prime customers, as a select group of 20 million, could be offered deeper hotel rate discounts than available publicly on Expedia and Priceline sites.

Recent e-commerce rulings in the UK over hotel rate price-fixing by IHG and online travel agencies allows deeper online discounts for ‘fenced-groups’, customer groups that require membership. Membership is how sites like TravelPony.com can offer deeper discounts than major online travel agencies at chain brand hotels without opening the door to hotel chain best rate guarantee claims. AAA and AARP are examples of fenced groups, generally offering lower room rates than best available rates (BAR). Hotel best rate guarantee claims require the lower rate to be publicly available for an eligible claim.

Priceline Group is the largest market cap publicly traded travel company in the world at $56.06 billion according to a January 7, 2015 ranking of the big travel players by Skift.com.

Priceline Group is the parent company of booking.com, the world leader in accommodations booking with over 4 million rooms booked each week. Priceline also owns Kayak.com, the meta-search site and Agoda.com, a leading online hotel booking site in Asia.

Expedia Inc. at $10.56 billion market cap does not even rank in the top 15 largest travel companies as ranked by market cap. Expedia is the parent company for Hotels.com, Hotwire.com, Trivago.com and Venere.com (Europe).

The EyeforTravel article points to Japanese e-commerce company Rakuten as a model for Amazon. Rakuten Travel operates an online hotel booking service in Japan that is expanding throughout Asia.

As online booking sites for hotel reservations expand into last minute booking sites and membership sites with deeper discounts than online travel site publicly available rates, the consumer might be the ultimate winner.

Related Loyalty Traveler articles

Major Chain and OTA Hotel Price-Fixing lawsuit in USA (Dec 18, 2013)

UK ruling may impact hotel chain BRG claims (August 9, 2013)

About Ric Garrido

Ric Garrido of Monterey, California started Loyalty Traveler in 2006 for traveler education on hotel and air travel, primarily using frequent flyer and frequent guest loyalty programs for bargain travel. Loyalty Traveler joined BoardingArea.com in 2008.

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