Amazon has long-since established itself as the fabric that holds together a world of consumers looking for an easy, effective and value-oriented environment to purchase almost anything - except for travel. As a veteran of the hospitality and travel technology industry, I believe Amazon should extend its footprint and offer travel and hotel products to deepen its relationship with customers and position itself as the ultimate end-to-end travel ecosystem. Though Amazon has offered flash deals and travel-related services in the past and Amazon Destinations tested the waters briefly, you have never really taken a true leap of faith.
Admittedly, the evolution of travel purchasing (from planning to fruition) has been a bit of a roller coaster. What began with travel agents has grown to include OTA's, metasearch providers, direct booking tools, and now the explosion of mobile complicating the market even further. With many travelers expressing an on-going propensity for the inclusion of activities, local experiences, and tours in their trip planning process - stitching a trip together can prove to be challenging. Further to that, the uncontested dominance of large players such as Expedia, Priceline, TripAdvisor, and Airbnb can create a great deal of angst for any prospective traveler trying to decide how to book a trip or even a single hotel room. These tools and industry giants are meant to make the travel process more accessible, but in reality, that process is still rife with compromise, overwhelming choice, competing channels, and the pressure to make timely decisions and reservations.
We have been told for years that a time when this will all become effortless, is just around the corner. Not just for the consumer, but for the travel provider as well, with the creation of a truly open marketplace where all elements can combine to ensure that everyone with a stake in the game gets exactly what they want. But, unfortunately, we still seem to be a long way away from this desired outcome.
In a recent Skift article, Brian Chesky, the CEO of Airbnb stated that they are ready to develop Airbnb into a true "ecosystem" or "one-stop shop for travel." This one-stop shop would include experiences, activities, tours, community, and more. In fact, he believes that there will be a massive economy based on experiences - and I agree with him entirely.
However, this only takes the travel booking evolution so far.
Amazon represents a pillar of frictionless e-commerce and convenience. Shoppers from all demographics find themselves looking to Amazon for daily necessities, specialized items, brand favorites that are no longer available at their local stores, gifts, equipment, competitive pricing — you name it. With next-day or two-day shipping, ensuring a sought-after item is at your doorstep within 48 hours can be as easy as asking Alexa to place that purchase. Now, imagine if the entire travel process, from start to finish, were also that easy? How can Amazon apply its model of immediate efficiency and ease to the demands of the modern-day traveler? What can Amazon achieve that Airbnb can't?
Aside from securing travel specific reservations (flights, hotel rooms and more), imagine the convenience of pre-ordering any travel necessities for your trip, all through one channel? For example, if a young couple is planning for an upcoming vacation to Belize and wants to purchase some new swimsuits, sunscreen, and beach towels, Amazon could represent a one-stop shop for reservations and travel supplies. Even further, travelers could ship those items directly to their destination (timed according to their trip) rather than packing them in their luggage. Perhaps that same couple wants to purchase a book about Belize to commemorate their trip but doesn't have room in their bags — they could buy it directly from Amazon on their phone and ship it to their home. The travel planning process could shift from one which demands weeks of effort across various channels and contacts to one which can be completed from start to finish in one, trusted online space.
And this isn't just an appealing offer for the modern consumer and traveler, but a potentially lucrative shift for Amazon as well. Morgan Stanley notes that his firm's rough ad efficiency analysis (ad spend/transaction) speaks to Amazon's ability to drive repeat/direct traffic, as its estimated $0.75 ad spend/transaction is a fraction of what Booking/Expedia spend. He goes on to predict that Amazon could make $600 million of profits a year if it builds an online hotel business roughly half of Expedia's size.
We also have to consider the widespread embrace of voice-powered AI technology. With the continued rise in popularity of Amazon Alexa (and more), consumers all over the planet are demonstrating a desire for complete convenience through means of voice-powered assistants. While AI chatbots and voice-powered search technology is in development within the hospitality realm, it has yet to come to seamless, consumer-approved fruition the way in which Alexa has. An Amazon travel experience could capitalize on this momentum, by including the capability for consumers to book every aspect of travel using a handheld device or via Alexa. Much like having a travel agent at your disposal, 24/7, in the comfort of your home and ready to address questions and requests. I like the sounds of that, and I have a feeling other travelers would too.
Let's not forget about Amazon's powerful recommendation engine - the one that lets me know what I may like or need, even before I do! Claiming conversion rates of about 60%, up to 35% of what consumers purchase on Amazon come from product suggestions based on such algorithms.
Of course, we're still missing one critical element of the trip planning process — the vetting of destinations, hotels, activities and more. How do most of us start on our process of elimination leading to purchase? Online reviews. And what online platform has the most in-depth reviews of almost every product available to the average consumer? Amazon. Word of mouth feedback from trusted consumers is one of the most valuable pieces of information to a traveler, especially those looking to achieve a unique travel experience. Evolving the engaged community of Amazon users into a travel ecosystem would help to ensure every user feels entirely confident and informed about each decision they make as it relates to their upcoming trip.
Without even setting its sights on the travel sector (yet), Amazon already has a potential lead on this movement towards the creation of a true travel and hospitality ecosystem. Tapping into the established success and underpinnings of the Amazon experience to include travel would enable the Amazon Purchase Ecosystem to deliver on what travelers want, from start to finish.
So Mr. Bezos - what do you think? Can I book my next trip on Amazon?
Puzzle Partner Ltd.
157 Cumming Drive
Barrie, ON L4N 0C8
Alan E. Young is the President of Puzzle Partner Ltd. and co-founder of Next Big Thing Travel & Hospitality. Previously, Alan has held executive sales and marketing level positions with startup companies such as Newtrade Technologies, (acquired by Expedia), Hotel Booking Solutions (acquired by IBS Software) and TrustYou. Alan is past Chair of the Board of Directors of The OpenTravel Alliance and has been very involved with other industry associations most notably AHLA, HEDNA, and HTNG. With over two decades of experience in the travel and hospitality technology world, Alan specializes in helping innovative companies achieve winning performance and dramatic growth.