LAST week Amazon quietly pulled the plug on its hotel-booking service. Amazon Destinations had only been running for six months, so the news came as something of a surprise. The service was initially limited to a just few cities, such as Seattle, but many thought it had the potential to grow (including Gulliver). In 2013, the combined sales for the two biggest online travel-firms, Expedia and Priceline, came to $278 billion. And yet the majority of hotel bookings are still made offline. So it seemed there was plenty of market still to grab.
Amazon, one would have thought, should have had some distinct advantages in its quest. It is a trusted online operator with a well-earned reputation for customer service. It also has the financial clout to disrupt what has become a duopoly. Yet it apparently decided the incumbents were too entrenched. As is Amazon’s modus operandi, it wasted no time withdrawing from the market to concentrate on its next big project. As is also its wont, it gave no explanation.
That is bad news for hoteliers, who don't like the bargaining power that the big two hold over them and would prefer more competition. But for customers there is more reason to be optimistic. Even as Amazon was beating a retreat, TripAdvisor announced plans to beef up its "instant booking" service. Last year the customer-review site enabled customers to book certain hotels directly through its own website, rather than being directed to another vendor. It has recently announced that Priceline, which owns the booking.com brand, is also on board, massively increasing its scope. Wyndham Hotels, too, is another recent big signing.