Amazon Adds Hotel Rooms to Its Everything Store
Amazon has quietly dipped its toes into selling hotel accommodations. And the deals can be stellar.
Usually with the Everything Store, a publicity machine is at full volume -- think of the ill-fated Fire Phone -- but not so with hotel rooms where, quietly, the company began slipping them into Amazon Local offerings a few months ago. They are easily overlooked. Look harder.
I had been booked into a three-night stay in late April at the four-diamond Heldrich Hotel in New Brunswick, New Jersey, at $474. Then an Amazon emailed popped into my inbox. "Still Time to Save: New Brunswick Stay." A click told me rooms could be had -- at the same hotel -- for as low as $104. I checked availability for my nights, cancelled the original reservation, booked anew for $347 and saved $127.
Understand, Amazon's foray into rooms has been greeted with some skepticism, mainly because the big online travel agencies -- notably Expedia (EXPE) and Priceline (PCLN) -- are themselves mammoth companies with huge marketing war chests and over a decade of knowhow in selling travel. It is one thing for Amazon to crush independent bookstores and record shops. It is another thing, snorted many skeptics, to take on the 800-pound travel gorillas in their own lairs.
'A Niche That Is Ripe for Disruption'
But at least some industry experts believe Amazon has staked out a niche where it may win. Said Donna Quadri-Felitti, clinical associate professor of hospitality and tourism at New York University, when asked about Amazon's prospects in selling hotel nights: "What took you so long, Jeff?" The question was directed at Amazon (AMZN) founder and CEO Jeff Bezos, and Quadri-Felitta's point is that hotels may be a niche that is ripe for disruption, in ways that benefit hotel operators, Amazon, and you and me.
Gautam Lulla, president of Travel Tripper, which provides marketing tools to hotels, said that Amazon may come into the fight with a powerful advantage. It excels at analytics - knowing a lot about its customers and their purchase habits -- and, said Lulla, if Amazon can tap into that to predict travel desires, it would be ahead of many competitors. He added that, to his mind, Amazon's entry into hotels is a plus both for hotels and consumers.
Pranav Patel, co-founder of HotelUpgrade.com and an experienced hotel manager, makes it three in holding an optimistic view about Amazon's future: "Amazon is going to become a viable contender in the OTA space, simply because they understand e-commerce and user experience and are amazing at user acquisition and loyalty."
Then there's this: Independent hoteliers hate Expedia, Hotels.com and the rest. The reason: they are nicked for booking fees as high as 30 percent. Buy a $200 room at Expedia, and, in many cases, the hotel sees only $140. Big, chain hotels get better deals from Expedia and the others. Their rates may be as low as 15 percent. But independents with little clout take the Expedia deal or they get left behind.
Focus on Independent Hotels
Amazon is solidly focused on independent hotels. A search of its inventory found no national chains. Amazon has not confirmed its fees to MainStreet but several independent hotels told MainStreet they were paying in the vicinity of 15 percent, perhaps half of what Expedia would want.
Amazon offerings are selective. In a recent search on www.local.amazon.com, there was a good deal at the hip Fifteen Beacon in Boston ($339 a night, down from $485). A New Braunfels, Texas Hill Country Cottage night was a jaw-dropping $51 (regular price: $165). The Chaminade Resort in Santa Cruz, California, was $139 (regular price: $319). The Jack London Lodge in Glen Ellen, California, was $85 (regular price: $174).
In a recent search, maybe 50 more hotels were on offer, from around the United States, with a sampling of Mexican resorts. That means you cannot rely on Amazon Local to find a cheap room for your next business trip, but when you are prowling in search of a great buy for a weekend getaway and you are flexible about location, this is a place worth looking.