Amazon Wants to Book Your Hotel Rooms, Too
Right now, Amazon Destinations is limited to hotels and inns in Southern California, the Northeast and Amazon's home turf of the Pacific Northwest. It's part of the Groupon-like Amazon Local site, listing area hotels that would be ideal for weekend getaways in a sea of vouchers for discounted meals, shows, and spinning classes. In fact, Amazon Local has been offering up marked-down lodging options for years. (It's mostly independent hotels, one writer noted in March.)
However, Amazon Destinations is different in that it's offering up hand-selected hotels even if they are only booking at the published rates. This is Amazon's first step toward being a traditional travel portal, and that has to leave market leaders Expedia (EXPE) and Priceline (PCLN) more than a little concerned.
The heavyweights of online travel may not be publicly nervous about Amazon invading their turf. Expedia and Priceline generated a combined $14.2 billion in revenue last year, and it will take a long time before Amazon's new local getaway guide gains that kind of traction.
Expedia and Priceline have traditionally taken care of disruptors or smaller upstarts by snapping them up. When Kayak threatened traditional booking sites as an aggregator of all deals, Priceline bought it out two years ago. Even the smaller Orbitz Worldwide (OWW) is in the process of being picked up by Expedia in a $1.34 billion deal, just months after Expedia acquired Travelocity.
Amazon Destinations is different because neither company could afford to buy out its parent. Amazon doesn't sell off its appendages, and if anything it would be Amazon doing the buying if it felt a transaction was necessary. The real question is whether the leading online retailer is committed enough to online travel to make it a force in this space.
All Around the World
Consumers and investors alike will want to bookmark the Amazon Destinations page. It's certainly a modest destination itself right now. There are brief area guides, and historical weather averages through the next few months. However, it wouldn't be a surprise if this becomes a bigger part of the Amazon story in the coming months and years. Let's go over some of the reasons to take Amazon Destinations seriously.
The hand-picked hotel listings encourage user reviews. We've seen Amazon use its perpetually growing catalog of merchandise reviews to influence shoppers and personalize recommendations. Amazon's good at this.
Amazon is guiding visitors to book travel through its proven shopping cart platform. Consumers trust Amazon, and many already have credit card information stored away with the e-tail giant.
If Amazon wants this to be big, it's not beyond promoting it on its heavily trafficked front page. We've seen Amazon do this with everything from the Kindle e-reader to its trade-in exchange. If Amazon sees an opportunity to forge a deeper relationship with its shoppers through travel, it will shout it from the rooftops.
Amazon is here, and now it wants to take you places.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Amazon.com and Priceline Group. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.