The travel industry has been anticipating Amazon’s entry into travel, and we at Skift have covered its current and impending moves through a Skift Research report, a podcast, and an e-book. Turns out the travel-focused action on Amazon’s side is, for now, via the cloud.
Amazon Web Services (AWS) has been energizing the marketing of its cloud-based services to the travel and restaurant sectors. In the past few months, the unit has been advertising for several new hires, and the job listings hint at its ambitions.
The job ads hinted that the company unit — arguably the most profitable part of its business — wants to move beyond being a cloud storage vendor to actively advising industry executives and engineers on how to transition to a cloud-first infrastructure. The ads refer to helping airlines, cruise lines, hotels, and restaurants — plus the tech vendors who support those suppliers.
“We are hiring globally across our business to keep up with the growth that we are experiencing,” said David Peller, head of worldwide business development for Amazon Web Services’ hospitality division, in response to questions. “AWS is providing industry-specific subject matter expertise to help our customers take advantage of new opportunities.”
Amazon essentially created the cloud services category. Today it retains more than half of global market share, according to Gartner, a market research firm.
“Within the past twelve months, hospitality and travel leaders including Korean Air and Ryanair announced they are going all-in with AWS and will migrate their enterprise-critical applications to the cloud,” said Peller.
In January Choice, one of the world’s largest hotel franchisors, said it would put about 1,000 software applications in Amazon’s cloud, where it already runs its global reservation system and its property management system.
Against the backdrop of those gains is the fact that rivals like Microsoft, Google, and Alibaba have been stepping up their competition.
DEEPER TRAVEL FOCUS
Amazon Web Services has had “practices” focused on hospitality and travel for a while. However, seven of its recent job openings suggest the company intends to weave closer industry ties.
The new hires will include a head of marketing for hospitality and travel who will help to coordinate a holistic marketing strategy; a global business development leader who knows how hotels, airlines, and restaurants can use cloud technology; a solutions architectwith domain experience in travel who can help come up with tools and processes that appeal to well-established tech giants and young startups in the travel sector; a global travel senior consultant who learns the needs of travel sector companies and makes sure they have a voice internally at Amazon Web Services. The job openings were posted on Amazon’s careers page, LinkedIn, and Indeed.
The ads suggested that Amazon Web Services is building a broader team of engineering and commercial leaders who can engage directly with the technical leaders and c-suite executives in the travel and restaurant sectors.
“By getting into travel and hospitality, Amazon will gain more data in an area of customer interaction — where it currently lacks visibility, relative to the other industries it is in,” said Hyoun Park, CEO and chief analyst at the consultancy Amalgam Insights. “Travel and hospitality also represent a vertical where there are a lot of workloads that are still on-site, relatively easy to manage from a cloud-based perspective, and ripe for the picking.”
Once Amazon has become pervasive as a cloud vendor in travel, it would likely try to upsell companies into other services, such as support for internet of things projects and serverless computing.
“Travel is relying more and more on artificial intelligence and the cloud,” said R. “Ray” Wang, founder of Constellation Research. “We see Amazon ramping up its efforts in the sector.”
The Amazon Lex service, for example, can build conversational interfaces into any application using voice and text, which might appeal to travel companies experimenting with voice-activated internet.
“The challenge is that few companies feel they can trust AWS and Amazon not to come after their business,” said Wang.
That said, many hoteliers wish that parent company Amazon would go farther and begin to offer hotel booking as a way to put pricing pressure on the online travel conglomerates. However, the company offers threats as well as opportunities for the travel sector, as a Skift Research report noted last year.
TRAVEL SECTOR CLIENTS
Large and small suppliers and vendors use Amazon Web Services already, of course. Peller cited Airbnb and OYO Rooms as travel companies that built their business from the ground up to leverage all of the advantages of cloud.
In the past two years, Barceló, which runs 245 hotels worldwide, has moved some of its financial and accounting software and customer relationship management systems into Amazon’s public cloud. The operator of Motel 6 and Studio 6 brands, G6 Hospitality, picked Amazon Web Services to host several of its operations.
Small vendors like hotel property management system Hotelogix run their core operations on Amazon Web Services. Travel distribution giant Sabre is shifting some services out of its data centers into a private cloud partly supported by Amazon Web Services, with a goal of closing the data centers. Another independent software vendor using Amazon’s cloud services is revenue management services provider Duetto.
Cost savings is usually a driver. The cloud avoids the cost of hardware and maintaining on-premises facilities and can, ideally, lower operational costs and raise staff productivity, said David Moore, senior vice president for travel solutions at Sabre.
However, there are risks, too. Poorly executed migrations can lead to costly surprises.
As of Friday, Amazon Web Services’ homepage lists its industry-specific solutions for sectors like automotive, financial services, and game tech — but not for hospitality or travel. That seems likely to change.
“We hope to add some additional information to the website later this year,” Peller said.
The Bottom Line:
Amazon is extending its reach even further into the travel sector, with job descriptions such as “Head of Marketing for Hospitality and Travel,” and “Global Business Development Leader.” Specifically, the company extremely successful branch, Amazon Web Services (AWS), is also looking to involve itself in the travel world. Through consulting and teaming with local travel partners, AWS will help support these smaller business’ plans to make their model more cloud-driven. Look out for AWS partnerships locally, as the company is excited to put serious investment into travel enterprises.
For the source of this original article, and more fascinating and cutting-edge travel news, visit: https://skift.com/2019/04/30/amazon-web-services-builds-out-its-hospitality-sector-strategy/