Home > > Why Amazon should acquire Airbnb – and not for the love of travel

Why Amazon should acquire Airbnb – and not for the love of travel

06/17/2019| 5:36:33 PM| 中文

The two platforms are complementary and if unified can offer a P&L for hosts to track key business metrics and optimize profitability.

Speculation persists on the possibility of Amazon's entry into travel. The mighty e-commerce giant shuttered operations of Amazon Local and Amazon Destinations in 2015 after neither service captured traction with online customers and travel suppliers in the heavily discounted flash sales model and crowded last-minute getaways market.

The merits of re-entering the travel market in 2019 are questionable given powerhouses like Google, Expedia, Booking.com and the big hotel brands. So what should Amazon's next move be? The answer is to acquire Airbnb. Amazon has already made several strategic moves in travel. If and when Amazon acquires Airbnb, the move will be to further penetrate its core business rather than its love of travel.

The Airbnb platform used by millions of hosts is basically a revenue-tracking and performance system to run a business. Plug in a service like Amazon Prime and you introduce the ability to track expenses. The two platforms are complementary and if unified can offer a P&L for hosts to track key business metrics and optimize profitability. Add 150 million travel users of Airbnb for retail opportunities - that exotic bungalow near Machu Picchu calls for hiking boots and rain gear. Bring the marketplace to the end customer and let the travel transaction complete the real customer journey.

Airbnb is opening up the platform for hotel brands to access. If big box hotels or their own home-sharing divisions join, the hotel relationship dynamic changes in Amazon's favor. Add Airbnb's purchase of Hotel Tonight and Amazon could further its relationship with hotels by tapping into the lucrative procurement business and RFP processes. Companies like Ariba, Avendra and others stand to lose ground or at least find a new and formidable competitor. Avendra reports to manage nearly US$5 billion in annual purchasing and include as buyers more than half of the top 30 hotel chains.

By bridging inventory and supply chain controls with an elaborate distribution system and sophisticated data processing platform, Amazon sits in the center of a data hub to manage, predict and price yield. Hospitality is a seasonal business, and with climate change creating more unpredictable weather patterns, Amazon can predict, supply, and price more intelligently than any other combined entity. The data would enable the two companies to basically define the marketplace to upsell the travel customer and prepare the host-hotelier - selling a traveler an umbrella for an upcoming trip and selling umbrella holders to the expecting host.

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TAGS: Amazon | Airbnb | hotel | traffic
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