Another online travel agency goes belly-up
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It’s no secret that there’s a showdown between online travel agencies (OTAs) and their hotel (or airline) competitors. From no-status stays to slashed perks, the relationship between sites like Priceline and hotels is both symbiotic and tense. But what about other OTAs?
Two days ago, Spanish news agency Preferente broke the news that Amoma, one of the final independent online travel agencies, had ceased operations. In a message posted on its site, Amoma blamed noncompetitive ‘price comparators’ for its woes, which give preference to their own listings for booking, as opposed those cheapest or most highly rated.
Prior to its demise, Amoma was the world’s third largest online reservations platform. While the news is certainly problematic for those who have booked reservations with the site, it also begs the question: What is the future of online travel agencies? Now that Amoma is gone, there are few major OTA booking platforms left. Years of consolidation and heavy undercutting has left little room for any but the most aggressive of sites. What’s going to happen now that the pool is shrinking, with heavyweights like Priceline owning most of the market share?
While hoteliers may be pleased to hear about the downfall of Amoma, they’re nowhere near in the clear — sites like Amoma exist using third-party wholesale rooms to offer discounted rates, and now Booking.com has gotten in on the game with Booking.basic. Their goal? Offer the absolute lowest rate possible, even if that requires outsourcing. In essence, the online travel agency has just used the services of, well, another online travel agency.
Is this the future of OTAs? One site after another cannibalizing its sales in order to capture as much of the market as possible? What does that mean for profits, for competition, and for hotel chains themselves? Though hotels are already trying their hardest to steer guests away from these agencies, they’ll be hard-pressed to make a case if the big OTAs are offering rock-bottom, wholesale pricing — even at their own expense.
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