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Internet Travel Monitor - Marketing, Research & Tech

July 12, 2017

Kayak and Amazon Echo Now Offer Voice-Powered Hotel Booking

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It took online travel players like Kayak more than a decade to optimize price-comparison among dozens of sources in a way that appeals to millions of shoppers.

Now, the rise of voice-based search poses a huge strategic challenge. Customer expectations may be shifting.

The brevity that voice search requires incentivizes companies like Kayak to become recommendation or personalization engines that provide only a couple of possible optimal results. That's a departure from the buffet-style approach that players like Kayak, Skyscanner, and Google have taken to date.

Against this backdrop, Kayak has debuted the capacity for its customers to book hotels by talking to Amazon.com's Echo family of voice-activated internet speakers.

The Stamford, Connecticut-based company is the first online travel player to offer the booking of hotels via Amazon Alexa, the persona of the retailer's Echo devices.

But it has been testing Amazon's smart speakers for some time. Since 2016, Amazon Echo users have been able to add a bit of free software to the device to ask Kayak questions like "where can I go next month for $2,000?"

Yet the user experience has been poor. To complete a booking, a user had to re-do the search via kayak.com and hope to find a matching result.

Now Kayak has a stopgap fix.

Its Alexa tool pulls inventory for hotels worldwide that offer free cancellation, Kayak says.

The Kayak tool sources hotels from two launch partners - Booking.com and Priceline.com - who, like Kayak, are two sister brands of the Priceline Group-owned company.

NO FLIGHT BOOKINGS ANYTIME SOON

Roughly half of Kayak's revenue comes from hotel bookings. That may partly explain why the search giant focused on making hotels bookable by voice first.

Kayak's chief scientist Matthias Keller gives a different reason why flights have been neglected: "There are far more government regulations around disclosures of fees for flights, which means there are more challenges to making the flight booking process conversational."

PAYMENTS AS A POINT OF FRICTION

An Amazon user must have already shared their credit card details with the metasearch brand by creating an account to book hotels at kayak.com.

Oddly, customers can't pay for the rooms via their Amazon accounts. They can't even use Amazon's digital wallet, Amazon Pay, similar to PayPal, Apple Pay, Mastercard's MasterPass, Google Wallet, and other services.

It may be some time until travelers are able to pay for their travel with so-called one-click digital wallets, Keller concedes. Broadly speaking, he says, the trouble is that online travel companies and hotel groups are not yet set up to handle payments from digital wallets. They still require a full, original credit card number, expiration date, and security code.

NOT FOR OBSESSIVES

Skift's analysis of the Kayak/Alexa interface suggests that it may work best for people with simple, repeatable travel needs, such as a corporate traveler who visits the same destination weekly.

For someone who already knows which hotel they want or who is not obsessed with finding the lowest rate, Kayak's Alexa "skill" offers a faster and more intuitive booking experience than using traditional methods.

Yet that describes only a sliver of the traveling public.

Given that many consumers search dozens of websites before booking a property, the typical information that Alexa and Kayak provide may not be enough to persuade a shopper to book.

For instance, if you use the (required clunky) phrasing "Alexa, ask Kayak to book me a hotel room in Boston for August 9th through the 11th", Alexa will return a single hotel recommendation that Kayak touts as having "been rated overall excellent" by consumers. (Kayak gets its data from TrustYou, a review aggregator.)

Alexa then adds: "It's a four-star hotel close to the Boston Public Library and is available for $445 a night."

It's not clear from that response how good of a rate that $445 a night is relative to other possibilities. That's a problem because many travelers are accustomed to comparison shopping.

A side note: Customer service - a potential booming area for voice-based interfaces - isn't offered either. Once the booking is complete, the user receives a confirmation email. Changes can be made via the partner Kayak works with, not Alexa.

To date, Kayak has few competitors. There's only one big one: Late last year, Expedia unveiled an Alexa "skill" that lets its customers ask Alexa about their flight reservations or book a car rental. But it still doesn't let users book flights or hotels.

TOWERS OF BABBLE

Amazon dominates the market in voice-activated speakers, with Morgan Stanley researchers estimating that the retailer has sold 11 million units as of earlier this year.

Of course, Amazon isn't alone in the market.

Since last autumn, Google has added an array of travel search functions through its Home speakers, but it has not yet added the ability to book travel.

Last week, Chinese tech group Alibaba released a voice-powered home device that has built-in support for Alipay, the company's popular online payment system, but doesn't yet sell travel. Alibaba hopes the move would enable it to catch up to e-commerce player Baidu, which runs China's biggest search engine, and earlier this year launched Xiaoyu Zaijia as a digital assistant, and Samsung, which is also releasing smart speakers soon.

Later this year, Microsoft is poised to offer its Cortana voice-activated Internet abilities in new Harman Kardon Invoke speakers.

Building smart speakers is seemingly easier than building travel shopping skills for them. Kayak's Keller says, "In defense of the travel industry, it's not just a technical challenge. It's also a strategic challenge."

He explains: "It's very new to sell goods by voice for any category of product that retails for more than, say, $100. You might buy pizza or order an Uber by voice today, but not many high ticket items are sold by voice yet. So travel is joining other verticals in tackling a hard problem. It will take time."


Copyright 2017 Skift. All rights reserved. From http://skift.com. By Sean O'Neill.
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