The Amazon of travel is back - Ed’s letter

This results season has so far operated along traditional lines in the hotel sector; a couple of soft-brand launches, plus some chat about how AI is going to make everything better.

In the world of the global players, all roads lead to distribution; they rarely operate the hotels under their own brands any more (with the exception of Accor, which still has a large managed portfolio) and so, when it comes to what they do all day, it’s all about marketing.

The soft brands, currently the favoured form of expansion, allow the companies to bring in more independent hotels without frightening them with rigid brand standards and so, in the current world of constrained development, allow the hotel groups to keep their pipelines trucking along.

The AI part is also focused largely on distribution - with some, such as Marriott, making operational noises, mostly around what might be nice to have in the future. The company’s CEO, Tony Capuano, told analysts: “We see AI as an opportunity to potentially redefine the customer acquisition paradigm that has governed our industry for the past several decades. We believe our industry-leading scale, the breadth and depth of our global portfolio, our large and engaged customer base, and our strong relationships with partners across the ecosystem position us well to capitalise on the significant opportunities Gen AI represents.”

The group hopes to bypass those most tricky and expensive of players in our sector, the OTAs. To do this, they need to convince hotels that they can sell their rooms more cheaply and, to do that, they have first tried loyalty programmes and are now layering AI on top.

Will it work? The OTAs also have access to AI, upsettingly, and are pretty single minded about it. They also have access to massive portfolios, which, no matter how many soft brands hotel groups insert, are still likely to lure in the passing leisure customer. Good job the rest of us are so motivated by those loyalty points then.

For those independent hotels, so yearned for by the likes of Marriott, the choice can easily look like high fees from the hotel groups or high fees from the OTAs. But this season, eternal disruptor Airbnb warned that it would be throwing its cap back into the hotel ring, with more details expected later this year.

Co-founder Brian Chesky said: “We’re really focusing on boutiques and independents, and a large percent of the hotel inventory in the world, are boutiques and independents. They provide incredible hospitality. And these are not niche. This is a huge percentage of the hotels in the world. And as we spoke with these hoteliers, they’ve been very, very enthusiastic. They want to list another channel. They like their low commission.”

The platform has attracted a small number of hotels over the years and even bought last-minute group HotelTonight, but listing hotels and their multitude of rates has always been to complex. The platform - which is eager to remake itself as the Amazon of travel - has been using some of this newfangled technology to make everything easier for hotels. Will it now fulfil its disruptive destiny?