Amazon recently announced it is offering a travel product, and it will likely become global in scope. Here are a couple of quick questions for hoteliers to ask when approaching this new opportunity.

It was only a matter of time. Amazon recently announced it is offering a travel product, and it will likely become global in scope. Here are a couple of quick questions for hoteliers to ask when approaching this new opportunity.

What kind of audience will Amazon pursue?

Based on your hotel’s target market, you will have to decide if the kind of customer Amazon will bring is a good fit for your product and pricing model. For instance, if they plan to start with Amazon Prime members, a subscription service similar to a hotel loyalty club, offerings may not be subject to rate parity limitations. This may provide you the opportunity to test different rates. However, if the program will be open to anyone visiting Amazon, traditional rate parity restrictions will likely apply and limit your ability to test the market.

Ask for a profile of the customer base so you can determine if it matches your target market.

Is this a sustainable source of new customers?

New channels that promise new customers can be encouraging if those customers are likely to return. However, if Amazon is planning to offer a flash sale or fire sale model these new customers may be unlikely to return without such deals in the future. Management should think about the real benefit and likelihood of repeat customers. A serial deal site is generally not a place to build a base of customers.

Ask about the sales model and be sure it has long-term potential.

In summary, big retailers and tech companies with vast consumer reach and adoption can look promising, but they can’t sell a single hotel room without rates and inventory. So, before you give that away, make sure your net revenue from a sale in the channel is worthwhile and make sure the channel can provide a sustainable new source of business.