Amazon was founded in 1994 by Jeffrey Bezos. Bezos was 30 years old and working on Wall Street at the dawn of the internet revolution. Like many others at the time, Bezos made the swift decision to quit his job and start a company to take advantage of the surging popularity of the internet. Bezos composed a list of the top 20 products that he could potentially sell on the internet, eventually deciding on books due to their low cost and universal demand. Unlike many of his fellow internet trailblazers, Bezos’ company recovered quickly from the dotcom collapse of the every 2000’s and so began the story of the world’s largest online retailer.
In the past two decades, Amazon has become a master in inventory management, online retail, online order fulfilment and logistics. Amazon has dominated almost every single retail category – with the notable exception of online travel retail.
“We are stubborn on vision. We are flexible on details…. We don’t give up on things easily. Our third-party seller business is an example of that. It took us three tries to get the third-party seller business to work. We didn’t give up.” - Jeff Bezos
Research conducted by Skift discovered that Amazon represents 25% of total US consumer expenditure. When you take into account that for US consumers, vehicle purchases, utilities, fuel and retirement savings account for 53% of consumer spending – all which Amazon does not earnestly participate in – a clearer picture of the sheer power Amazon wields comes into focus.
Between 2013 and 2015 Amazon made two attempts to enter the online travel market, starting with Amazon Local, which relied heavily on flash sales. Later in 2015 Amazon tried again with its short-lived Amazon Destinations – a merchant model that required hoteliers to manually upload inventory availability and pricing. Both these ventures were shut down by Amazon only months after their launch.
Until June 2018, Amazon had not been able to gain a foothold in the online travel industry, but as they have shown in previous ventures, that doesn’t mean they won’t try again and have just launched a new joint venture with Marriott International.
On June 19, 2018 Amazon announced a partnership with Marriott to make its internet-enabled Echo smart speakers standard across many of Marriott’s hotel rooms. The partnership has been named “Alexa for Hospitality”, a variation of Amazon’s popular Alexa voice assistant that can be customised to include key information for guests, such as check-out time, and the ability to order room service or request housekeeping.
The partnership with Marriott, should come as no surprise as the hotel has been testing out both Siri and Alexa devices within the past year. According to Amazon, Marriott International will introduce the new Alexa system at in Marriott Hotels, Westin Hotels & Resorts, St. Regis Hotels & Resorts, Aloft Hotels, and Autograph Collection Hotels starting this summer. Alexa is set to become hotel guests’ virtual concierge; assisting them in tasks like playing music, ordering towels, and controlling in-room temperature and lighting.
This slightly less ambitious foray into the travel industry is certainly a more calculated risk on Amazon’s part than what has been attempted previously, as the smart device market certainly sits within their wheelhouse. With the future potential to plug Alexa directly into a hotel’s PMS or booking engine, this venture certainly opens some exciting possibilities for Amazon’s next steps into the digital travel space.
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