Amazon could seriously disrupt the travel industry, say analysts
Apple may have taken the laurels to become the first trillion dollar firm in the history of the world. But Amazon will most likely follow suit soon. And one of the reasons is that it still has plenty of opportunities to pursue.
Two one trillion industries it doesn’t (yet) currently tap into are petrol (gas) stations and travel. And of the two it seems obvious that Amazon’s particular skills are likely best matched to tackling travel and bringing efficiencies to the sector. So when will you be taking a trip up the amazon that you bought on Amazon?
One Wall Street analyst explains the problems and yet also why Amazon is well suited to tackle the problem and, crucially, why it shouldn’t shun the opportunity:
Based on our estimates, Amazon is currently pursuing 8 of 10 market opportunities that exceed $1T, globally. We see an opportunity for it to exploit the remaining two – gas (stations) and trave. The company has a history of solving complex logistical problems. Financially, it seeks opportunities that can generate significant free cash flow.
– Tom Forte, analyst, D.A. Davidson
There are quite a number of things that Amazon could bring to the travel industry. Proper aggregation of flights by all providers, for instance, has eluded some of the comparison sites for some time because crucial operators won’t provide feeds.
And whilst there are some very successful players for hotel rooms and accommodation in general out there, the options can also still be patchy. It’s also not unusual for hotels to note that you can get cheaper by booking directly, rather than via a third party.
But most crucially they could bring their well regarded reviews system to travel options and that would bring consumer expertise too. Which is the best hotel in resort X for people who like sea swimming but can’t make it up and down hills?
As a travel service provider, would you use Amazon as a merchant? But, perhaps more crucially, would you book a holiday cottage or helicopter trip via the marketplace?
I think, as a consumer, IF they put the right amount of work into getting it right, they could potentially kill the competition – I have often been frustrated by travel sites that advertise but then I find I have to phone up, only to be told that that particular deal sold out an hour ago and would I be interested in… (no, I wouldn’t – I was calling about that one…) So if Amazon were to launch a travel site, I’d definitely be interested – would they offer perks to Prime customers, for example – and could I just click through to book, using my saved payment methods? Would there be comparison built in, or would that be for a third-party site, and would they use their might to secure the absolute best prices for Amazon Travel?
Interesting times indeed.