Amazon is all about controlling the supply chain.
Quote from Stephen Joyce, CEO of Rezgo, in an article on PhocusWire this week.
Amazon’s multifaceted – and likely inevitable – path into travel
The mid-2000s was an interesting period in online travel, coming little more than ten years after the first travel websites appeared on the scene.
Hotels and airlines had finally started getting their houses in order when it came to providing a decent online presence, at the same time as online travel agencies had begun to figure out how to play the web advertising game.
Ian McCaig, then CEO of Lastminute.com (owned at the time by Sabre), used to often say that the market would eventually settle into one where a handful of powerful OTA players would dominate and others would be forced into providing more specalized services or products.
Brands that found themselves stuck in the middle would struggle.
At the same time, commentators would often speculate on whether the next threat to the status quo would emerge from the outside the industry.
A typical analysis would mention Google (we all know what happened there), Apple (it now co-owns the app ecosystem) and Microsoft (well...).
The braver analysts would sometimes mention a fledgling social network known as Facebook as having the ability to exert some kind of influence over the industry - something that came to bear but mainly in the realm of inspiration, branding and community.
One brand that was noted only fleetingly was Amazon - though this was often met with raised eyebrows. Indeed, on one occasion, when it's logo was included on a presentation slide as a potential threat, a wise-cracking audience member retorted that the then-bookseller ecommerce brand could be used to distribute travel agency brochures. Ha! How we all laughed...
Amazon in 2018 is a very different organisation, in many ways, but not least in terms of its product spread, influence in the wider ecommerce landscape and, most importantly, its capacity to disrupt sectors in which it currently does not operate.
McCaig's analysis that those in the middle will face a squeeze on their business as a result of large players having the technology, funds and ability to get even bigger comes into sharper focus if, as most now believe, Amazon does the obvious thing and finally puts the travel industry in its cross-hairs.
The ill-fated Amazon Local project (hotel deals) of a few years ago, whilst giving the rest of the industry an opportunity to say "more difficult that you thought, eh?", probably was enough for Amazon to realise that to seriously tackle the industry it needed to rethink its strategy.
Funnily enough, there is still no sign at all of anything coming out of the company's sprawling Washington state headquarters that indicates its next move.
But yet it has everything required to make one, not least its ability - as Joyce noted above - to secure partnerships and exert its influence over the supply chain and, if it goes down that route, marketplace-type platform that it uses so successfully with other goods.
When (rather than if) this happens, those that currently cling to what business they can get after the existing powerhouses of the industry, will find themselves squeezed even further.
This is a time of massive opportunity for some (product owners, who get a fresh and powerful channel to play in) and, sadly, worrying signs of weakness ahead on the horizon for others.