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Amazon Destinations

Online travel agency for local getaways
Amazon Cemetery
GENERAL INFORMATION
Category:
Travel
Started:
2015
BUSINESS FAILURE
Cause:
Competition
Closed:
2015

Description

Amazon Destinations was an online travel agency that had an emphasis on drive destinations and weekend getaways with the tagline “Hit the road: Book local getaways.”. The user could book hotels that were within driving distance and therefore they had no flight booking options. 

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Cause of Failure

Amazon Destinations closed just a couple of months after launch. Despite many speculations, no one knows the reasons behind the closure. Amazon has a known strategy of venturing into new businesses and pulling the plug quickly if the desired outcomes were not achieved.

Some speculations around the closure include the fierce competition that Amazon faced from fellow OTA’s in the industry, such as Expedia and TripAdvisor. Expedia’s market share in the US increased when acquiring multiple smaller OTA’s. Besides, TripAdvisor’s massive market share from their widely popular instant hotel booking platform created a big barrier to entry in the industry – not unlike the barrier to entry that Amazon is creating for other e-commerce platforms.

In the end, Amazon did provide a service for a niche market and had some advantages. Hotels even showed positive feedback, as their bookings increased due to traffic coming from the platform. Furthermore, with its strong presence online and with the use of its established web services, advertising would have been much easier. However, competition from fellow OTA’s with big market share may have resulted in Amazon not getting the numbers they projected, resulting in the closure of Destinations just six months after launch. 

References

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