Amoma.com Troubles May Delight Hoteliers That Hate Its Rate Discounting

Online consumer review forums lit up Friday with complaints from many travelers that they had been stranded when hotels stopped honoring reservations booked via Amoma.com, an online agency.

Spanish news publication Preferente claimed Friday that Amoma had filed for bankruptcy. Amoma CEO Nicolas Arthur and his co-founder, chief technology officer, Yann Arthur, didn’t respond to our text messages at the time of publication.

UPDATE: On Saturday, Amoma stopped taking bookings. It posted a message on its site blaming price-comparison sites for unfair business practices.

Virgil Ciebrant, a Dutch tourist visiting Paris, told us Friday that in April he had booked a stay at B&B Hotel at Disneyland Paris through Amoma. But when he showed up Friday the hotel said it would not honor the booking because Amoma hadn’t been paying its bills, Ciebrant said.

Trustpilot, a site collecting consumer feedback, reported a flurry of messages from users this morning saying that hotels had denied their bookings because of payment problems. Amoma has been attempting to get TrustPilot to remove many of them for “inappropriate content.”

“Everyone knew this was going to happen,” Guilain Denisselle, editor of French trade publication Tendance Hotellerie. “The question was not will it happen but when. You can find hundreds of bad comments from consumers in forums on TripAdvisor.”

Amoma stopped responding to comments on TripAdvisor last month.

“We immediately removed Amoma from TripAdvisor’s hotel listing offers as soon as we became aware of their financial trouble,” said a TripAdvisor spokesperson Friday. “We sympathize with anyone affected by this and would advise any travelers with inquiries about existing Amoma bookings to get in touch with their customer support team as soon as possible. Prior this event, Amoma had been a long-standing partner of many online travel agencies, hotels and travel planning sites, including TripAdvisor.”

Amoma’s U.S. reservation service line didn’t respond to our call after 45 minutes. Neither did its customer service line or Twitter handle.

Long-Time Critics

Amoma had soared by often undercutting hoteliers on prices.

Many hotel critics alleged Amoma misused wholesale rates not intended for public consumption.

Many hoteliers suspected that Amoma would take inventory that hotels had set aside to distribute via wholesalers to offline markets, such as travel agencies in ethnic communities, and re-purposed the discounted inventory for general public consumption on their site.

Amoma repeatedly declined media interviews in the past couple of years. But in public forums, the Geneva-based company noted that Switzerland has lower taxes than some other countries and that that sometimes gave it an advantage on price.

Amoma has been the main reseller of so-called onward distributed inventory of wholesale rates, according to research by OTA Insight, which provides rate benchmarking and other business intelligence services to hoteliers and online travel companies.

One of the travel industry’s most significant providers of wholesale hotel inventory is Hotelbeds, the so-called bedbank. In a statement Friday, Hotelbeds said that Amoma was not a major customer.

“During the last few years, we have been reducing significantly our business with Amoma. At this moment it represents around 1 percent of our sales, and therefore there is no dependence on this client,” a Hotelbeds spokesperson said.

Long-Time Critics

Google’s price-comparison search tends to favor agencies with the lowest price, even if the agencies don’t pay the highest bid in Google’s advertising auctions. Trivago and some other so-called metasearch companies also promoted Amoma using similar ad auction mechanisms.

In 2016, Google chose to make Amoma a partner for its instant-booking service. That meant that Google customers could buy rooms from the online agency without leaving its interface. The move appeared to provide critical fuel for Amoma’s growth.

In 2017, Amoma claimed it processed about $560 million (€500 million) in bookings, mainly for hotels.

“Amoma could exist partly because bedbanks granted them with the inventory at highly discounted rates but mainly because metasearch allowed them to advertise even though they had been made aware of the risk,” Denisselle said. “Maybe it’s the right time for metasearch to bring ethics to their business.”

The Booking.com Factor?

Booking.com, the giant online travel brand, made a change that may have had the effect of causing headwinds for Amoma and the raft of its copycats.

In 2018, Booking.com introduced its own wholesale rate service, Booking.basic. That move let it capture some of the discounted inventory.

“We’re seeing the largest OTAs [online travel agencies] start to work with wholesalers, leading to smaller OTA’s which based their inventory on wholesalers finding themselves in competition with much bigger budgets, sophistication, and the same rates as they have,” said Dori Stein, CEO of Fornova, a hotel business intelligence service.

Most of the larger hotel chains and some of the smaller hotel groups have been tightening up the supply of so-called static rates that the Amomas of the world have depended on.

“Hoteliers might breathe a sigh of relief at the news that an OTA [online travel agency] known to be at the heart of many instances of disparity might no longer affect the integrity of their pricing,” said Gino Engels, co-founder and chief commercial officer of OTA Insight. “But plenty of other OTAs — some acquiring rooms via wholesaler on-selling — will be eager to take their place. Of course, there are many good actors in this space. But it’s a crowded and volatile market.”

Many brands are also clamping down on franchisees, who often are to blame for onwardly distributing wholesale inventory in the wrong way, Stein of Fornova said.

Late last year, online travel agency HotelQuickly suddenly ceased operations, leaving hundreds of travelers stranded.

Amoma CEO Arthur previously ran Olotels, a French online travel agency that was liquidated in 2013 leaving some customers stranded according to news reports at the time.