November 24, 2014

Why Amazon Travel has little chance of disrupting OTAs


Judging by Google's experiences in the online travel industry, Amazon Travel might not pose much competition to the leading OTAs, such as Priceline and Expedia. The leading OTAs have hardly suffered any agitation from Google's presence in the space, writes SeekingAlpha.

A good case in point for its thesis is Google and its online travel efforts. Google is a perfect comparison to Amazon in this case, because both are predominantly online companies, coupled with the fact that Google has already dipped its toes into the lucrative online travel industry.

The company has launched several high-profile online travel ventures, including Hotel Price Ads in 2010, Hotel Finder in 2011, the acquisition of the highly popular ITA Software in 2011 and the recent licensing deal between it and Expedia-backed Hotel 77 Software in April. Additionally, Google boasts a global online reach that only Facebook can match: more than 1.2 billion people use Google Search every day, comparable to Facebook's more than 1.2 billion monthly active users.

Now, you would imagine that competing with Google in anything online would be about as difficult as trying to drown a fish. If there is any company that has real potential to truly disrupt the online travel industry, it would be Google. Yet, the leading OTAs have hardly suffered any agitation from Google's presence in the space. Its growth momentum shows no signs of slowing down, and any slip-ups in the recent past can hardly be attributed to any competitive pressure from Google.

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