OTA (Online Travel Agents)

The growth of the Internet has significantly impacted bookings made via indirect online channels and supplier-direct websites.

Before 1996, travelers had two options: book directly or contact a travel agent. Hotels used to sell to wholesalers, who then sold to tour operators, who sold to travel agents, and finally to tourists. The issue with this approach is transparency; no one knows how much was/is being paid.

With the emergence of OTA, control (apparently) returned to the hotel, allowing the hotel to know how much the guest was paying and how much it was earning.

OTA Market Trends

Online travel agencies (OTAs) are gaining popularity due to their convenience, price transparency, wide selection, user reviews, accessibility, and special deals. Online travel platforms have made it easier for travelers to access information about destinations, accommodations, transportation, and activities, democratizing travel planning and booking. They have also expanded the reach of tourism businesses by allowing small and medium-sized enterprises to showcase their offerings to a global audience, attracting international travelers. Moreover, the ability to compare prices across multiple online travel platforms encourages competition among suppliers and leads to better deals and value for travelers.

Booking Holdings began life in 1997 as Priceline.com, with its Name Your Price feature. It has since grown to dominate online travel, with most revenues from Booking.com. It also owns Agoda, Kayak, Cheap Flights, Rentalcars.com, Momondo, and OpenTable, among others.

Expedia Group started as a division of Microsoft in 1996 and was spun off in 1999. In addition to the flagship Expedia.com, it owns Hotels.com, Hotwire.com, Orbitz, Travelocity, trivago, Venere.com and vrbo.

Ctrip was founded in 1999 and became the dominant travel site in China. It recently expanded globally with its purchase of Skyscanner in 2016 and Trip.com in 2017, which it took as its global identity.

Airbnb, which began in 2006 as a home-sharing website, is an emerging player in the OTA space. Its acquisition of Hotel Tonight in 2018 accelerated its expansion into hotel supply and its ongoing investments in Experiences support its stated ambition to compete globally as an OTA.

OTAs have gained a 40% share in hotel bookings: In 2011, there was one OTA booking for every 4.3 direct bookings; in 2015, there was one OTA booking for every 2.7 direct bookings.