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Amazon: Lessons, Threats, and Opportunities for Travel

by Seth Borko + Skift Team - May 2018
Digital Marketing
Online Travel
Travel Tech

Skift Research Take

Amazon likely has a role to play in the future of travel distribution, marketing, or devices — if not all three. Travel leaders need to prepare today, or risk being caught flat-footed tomorrow.

Report Overview

For one of the most important companies in the world, Amazon’s impact on the travel industry has been surprisingly small to date. It is unlikely to stay that way for long.

This report is effectively divided into two parts, each trying to understand what Amazon means for the travel industry. In the first section, we dive deep into the company’s business model. We distill four lessons from Amazon’s model that we believe can apply to the travel companies large and small.

In the second half of the report, we look at what direct impact Amazon could have on the travel competitive landscape. We imagine at least three scenarios whereby Amazon could enter the travel industry: 1) It could offer its own travel product and compete directly as an online travel agency or metasearch engine, 2) It could play an increasingly large role in direct marketing by virtue of its growing display ad business and its leading position in voice search, and/or 3) Its expanding line of smart devices could open up new avenues for search or place it directly in-destination as part of the guest experience.

Companies and investors may be obsessing over that first scenario — direct competition— but the other two scenarios are arguably more likely, even if potential impact may be smaller. For instance, we take a close look at Amazon’s advertising business which has quietly grown to overtake better known platforms such as Twitter or Snapchat. Could Amazon provide the travel industry, with much needed leverage against the Google and Facebook Duopoly?

Amazon has the potential to impact your business, no matter what part of the travel industry you are in. It is crucial to understand how it operates and what its latest thinking is. Waiting to react until Amazon has already rolled out its newest operations will be too late.

What You'll Learn From This Report

  • A deep dive into Amazon’s business model today and context on how it has evolved
  • Four lessons that the travel industry can learn from Amazon’s success
  • A focus on what Amazon Prime can teach us about customer loyalty
  • Our take on three ways Amazon could impact travel
  • Ways in which Amazon could directly compete with travel incumbents
  • A closer look at Amazon’s little-known, but rapidly growing advertising business
  • Thoughts on what voice assistants and smart devices could mean for the future of travel

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