The Complete Guide to Online Travel Agencies in 2021 (OTAs)

Online travel agents are the travel industry's largest source of bookings and often use package deals including airfare and hotels or special ... News&Analysis News&analysisdrivenbytheHotelTechReportplatformandglobalcommunity. &ltHotelTechReportBlog Categories All Marketing RevenueManagement Operations GuestExperience Meetings&Events VacationRentals IT&BuildingManagement Food&Beverage HR&Staffing Pressreleases More Meetings&Events VacationRentals IT&BuildingManagement Food&Beverage HR&Staffing Pressreleases Gotoresources HotelBedbanks OpinionArticle TheCompleteGuidetoOnlineTravelAgenciesin2021(OTAs) ByHotelTechReport LastupdatedAugust09,2021 Onlinetravelagentshavebecomeanintegralpartofmanytravelers’“searchandbook”routine.Itusedtobesomuchmoretedioustobooktravel,requiringaphonecalloranin-personvisittoaphysicaltravelagent.Now,travelerscanselfserveallthewayfromresearchtobooking.  Ifyou'relikemosttravelers,you'veusedanOTAwithoutreallythinkingmuchaboutit. Thewebsiteworkswell,withlotsofchoicesandarelativelysmoothbookingexperience.Butifyou’veeverwonderedwhatanOTAactuallyis,howOTAsmakemoney,whytravelerslikeyouuseOTAsandwhatthebiggestOTAsare,thenthisisyourplace. We'vecompiledsomeoftravelers’mostfrequentlyaskedquestionsaroundOTAsandansweredthemallinoneplace.Let’sgetcurious!   What'sanOTA? “OTA”standsforOnlineTravelAgency,whichisatravelagencywhoseprimarypresenceisondigitalchannels.Consumerscanuseawebsiteand/ormobiledevicetosearchandbooktravel--allwithoutthetraditional“gatekeeper”travelagent.OTAsconnecttothefullbreadthoftravelproviders,givingtravelersaccesstoalloftheinventorythattheymaywantfortheirnexttrip. Onlinetravelagentsarethetravelindustry'slargestsourceofbookingsandoftenusepackagedealsincludingairfareandhotelsorspecialofferslikeflashsalestodrivemorebookingstoairlineandhotelpartners. ThesemassivetravelwebsiteslikeBookingandExpediahavemillionsofmonthlyvisitors. Largehotelgroups(like Hilton andthelike)havebeenconsolidatingandbuildingnewsubbrands,whichmeansthattheyhavealowerrelianceonOTAs;travelerscanfindmanytypesofaccommodationsontheglobalbrands’ownwebsites.Yet,manyindependenthotelsrelyentirelyonOTAstodrivetheirbookingsastheydon’thaveabookingengineoftheirown.Eitherway,OTAshaveabreadthanddepthoftravelinventorythatcoversallsegments,geographiesandgroupsoftravelers. It'salsoimportanttounderstandwhatARENOTonlinetravelagencies. MetasearchengineslikeTripAdvisorandGoogleFlights,forexample,arenotOTAs. Havingsaidthat,Booking.com(formerlyPriceline.com)doesownmetasearchplayerKayaksotherearesomeoverlaps(althoughwithdifferentbrands). IntheUnitedStatesExpediaisthedominantplayerwhileinEuropeitisBooking.com.   HowdoOTAsmakemoney? MostOTAsmakemoneybytakingacommissionperbooking,whichisanywherefrom5%toupwardsof25%.Theactualcommissionrateisnegotiatedonabrandbybrand,propertybypropertybasis.Ingeneral,largerhotelsandbiggerbrandswithmanypropertiesusetheirleveragetonegotiatelowerrates.SowhenyoubookthatboutiquehotelonanOTA,it'slikelythattheyarepayingmoreoncommissionthanthenamebrandHoteldownthestreet.  MostOTAsalsomakemoneythroughadvertising,inwhichhotelspaytobeprominentlyplacedaboveorganicresultsinrelevanttravelersearches.Thismodel,whichisalsousedbymetasearchsites(seeWhatismetasearch?formore),isgenerallyonapay-per-clickbasis.   WhydotravelersuseOTAs? OverafifthoftravelerssaytheyuseOTAstobookallorpartoftheirtravel.AndOTAs(andtheirmetasearchcousins,oftenownedbymajorOTAgroups)remainpopularamongallagegroups.  OTAsarepositionedacrossmanytouchpointsthroughoutthecustomerjourney.   Whyisthat? Atthehighestlevel,therearethreemainreasonswhymanytravelersbooktheirtripsonanOTA: Choice.Onlinetravelagenciesarea“onestopshop”forallthingstravel.Fromflightsandhotelstoshort-termrentals,carsandvacationpackages,youcanprettymuchfindanytypeofproductthatyouwantonanOTA.  Price.OTAshavedoneanexcellentjobofdevelopingaperceptionofvalue--eventhoughtheyaren'talwaysthelowestpriceorthebestvalue.Therealvaluehereliesincomparisonshopping.It’seasytocompareoptionsonanOTAandthattypeofinformationisveryvaluabletoconsumers. Convenience.OTAsaretheEverythingStoreforTravel,availableonanydevice.It’saconvenientplacetobookyourcarrental,hotelandflightsinasinglereservation.It'ssomucheasiertodealwiththatsinglepointofcontact-- especiallywhenthingsgowrongandyouneedhelp.Ratherthancallingmultiplenumberstopuzzletogetheranewitinerary,youonlyhavetocallonenumbertogetitdone. Nowlet'sassumeandtogetabitmoreofagranularandgeekyviewintowhatconsumerswantfromOTAs.ArecentresearchreportfromJul2020askedthisveryquestioninitstitle,Whydopeoplepurchasefromonlinetravelagencies(seegeekygraphbelow).Whileitwasbasedonalimitedsamplesizeofusersfromabudgethotelbrand,theresultssuggestthattravelersuseOTAsduetoaperceptionofgreatertrust,safetyandquality: Hygiene.Travelerswanttobeassuredoftherelativecleanlinessoftheserviceorproduct.Byusingareputableonlinetravelagency,travelershaveanexpectationofa certainlevelofquality. Theattributesofthebrandmakeabigdifferenceintheperceptionofquality. Privacyandsecurity.Privacyandsecurityarealsoimportant.And,justlikehygiene,TravelershaveacertainleveloftrustintheOTAbrandtodeliveraqualityexperiencethatwon’texposethemtoprivacybreachesorphysicalharm. Reviews.SocialproofhasamajorimpactonwhytravelersuseOTAs.AfeelingthatothershadagoodexperiencegoesalongwayinpullingmoreconsumersintotheOTAecosystem. WhatarethedrawbacksofOTAs? TherearealsosomedisadvantagesofusingOTAs,whichtravelersmustbeawareof.Forone,travelersoftenareluredbylowpricesonmanyonlinetravelagencies.Yet,oncetheytrytobook,theyfindoutthatthepriceincludeshiddenfeesoraddedrestrictionsthatwouldn’tbefoundbybookingdirectlywithanairlineorhotel.  NicheOTAs,whichcanpopupseeminglyovernight,oftenhidethetruecostofatripduringagivensearchtoenticeconsumerstoclickthrough.Theworstactorswillactuallyappeartoofferthelowestpriceallthewaythroughtobooking. However,onceyoucheck-intotheirflightorhotel,youmaydiscoverunexpectedfees.Allofasudden,that“steal”ofapriceactuallybecomesmoreexpensivethanitwouldhavebeenbookdirect. Examplesofthesetacticsperiodicallypopup,suchaswhenoneonlinetravelagencywasaccusedofusingimproperchargesandbait-and-switchfares.Thetacticcanmisleadconsumers,whoseeanOTAasthecheapestoptioninsearchresultsandthusclickthroughtobook. Anothermajordrawbackiscustomersupport.NotallOTAsarecreatedequalonthisfront.Especiallywhenitcomestoregionalones,travelersoftenfaceless-than-idealsupport. Fortheaveragetrip,wheneverythinggoeswell,thisisfarlessofanissue.It'swhenthingsgowrongthatsupportmattersgreatly.Noonewantstobestrandedwithoutanyonetohelp!  Thiscanbeexacerbatedduringdisruptionscomeoutwhentravelsuppliersprioritizedirectworkersoverothers.Whenbookingdirectlywithahotelorairline,travelerswilldealdirectlywiththecompanyforanyissuesthatarise.  Soit’snotalwayscut-and-drythatanOTAwillbeabletoprovideyoubetterormoreeffectivesupportthanatravelcompany-- andinsomecases(especiallywithmoreniche/regionalOTAs)there’sspottysupportthatcancausemorefrustrationthanthepricesavings.      Whatarethetoponlinetravelagencies? Whenchoosingwheretobook,mostconsumersoptforoneofthetopOTAs:BookingHoldingsandExpediaGroup.That’snotreallydifficulttodo,asthesetwocompaniesownthebulkofonlinebookings.Withmanybrandsthatspancategoriesandregions,ExpediaandBookinghaveallcornersoftheglobeandalltravelnichescovered: ExpediaGroup InadditiontoitsnamesakeOTAExpedia.com,whichsellsallcategoriesoftraveltoaglobalaudience,thecompanyoperatessitesthatspanhotels,groundtransportation,cruises,vacationrentals,metasearchandbusinesstravel. Hotels.com.Expedia’shotel-focusedOTAismostwell-knownforitsgenerousandstraightforwardloyaltyprogram,whichrewardsafreenightforevery10nightsbookedontheplatform. Vrbo.Short-termrentalsarethecoreoftheVrbooffering,whichrecentlymergedwithHomeAwaytobecomeExpedia'smaindestinationforvacationrentals. Egencia.CorporatetravelmanagersuseEgenciatosupporttheirbusinesstravelneeds.Withself-serviceoptionsfortravelersandcompliancetoolsformanagers,thefocusisonsavingsandease-of-use. trivago.The“trivagoguy”becameaworldwidesensationafterappearingincommercialswithoutabelt.Thehotelmetasearchplatformprovideshotelpricecomparisonsacrossits55localizedsites. Orbitz.ThisOTAhasastrongfocusonNorthAmerica,wheretravelerscansearchflights,hotels&travelbundles.OrbitzforBusinessistheOTA’scorporatetravelarm.CheapTickets.AsasubsidiaryofOrbitz,Cheapticketsisfordiscountedhotels,flights,localevents,travelbundlesandcruises.Thesite’sVacationValueFinderassiststravelersinfindingthebestdeals. Travelocity.TheRoamingGnomehasbeenoneofthemostsuccessfulmarketingcampaignsintravel.TheOTAisalsoknownforitsPriceMatchGuarantee,whereitwillmatchanypricefromacompetitor. Hotwire.Thisisanopaquedealsitespecificallyforhotels.Travelerscanseestarratingandcostfortheirsearchdates,andthenmakenon-refundablereservationsbasedonanoverviewofthehotel’scategory. Wotif.TheWotifportfolioincludesWotifandLastMinute,whichoffersflights,hotels,packagesandlast-minutedealstotravelersbasedmostlyinAustraliaandNewZealand.ebookers.ThisregionalOTAservestravelersprimarilyfromtheUK,aswellasaroundEurope.Travelerscansearchandbookflights,hotels,carrentals, activitiesandpackages. CarRentals.com.Travelerscanbookrentalcarsfromthemajorbrandnames,aswellassmallerregionaloutfits.ThenicheOTAcovers29,000locationsin197countries. ExpediaCruises.ThecruisearmofExpediaGroupgivesconsumersthecontrolandflexibilitytobookcruises,whichcanbemorecomplexthantypicaltravel.Therearealsoachainofretailoutlets,socruisescangetexpertassistanceface-to-face.   BookingHoldings HeadquarteredinAmsterdam,BookingHoldingsisbestknownforitsflagshipbrandBooking.com,whichsellsalltypesoftraveltoaglobalaudiencein43languages.Theglobalconglomeratealsooperatesnichewebsitesservingspecificsegmentsintravelandhospitality. Priceline.ThisOTAisfocusedprimarilyonNorthAmericaandisknownforitsdiscountsanddeals.ThelatestisPricebreakers,asemi-opaqueshoppingoptionthatshowstravelersthreehotels,oneofwhichwillbeassignedafterbooking. Agoda.ThisOTAisstronginAsia,offeringover2millionhotels,homes,resortsandhostelsacrossthecontinent.Italsosellsflights.Kayak.Kayakisametasearchpricecomparisontoolforflights,accmmodations,packages,andrentalcars.Kayakhas60localizedsitesinover24languages. Cheapflights.Thebrandpromiseisrightthereinthename:thisistheplacetofindcheapflights.ThesiteisactuallyasubsidiaryofKayakandappliesitsparentcompany’smetasearchmodeltoflights. Momondo.Anothersubsidiaryofkayak,thissiteisaflightfareandtravelsearchaggregator.Travelerscanfindandcomparepricesforflights,hotels,rentalcarsandpackagedeals.RentalCars.com.ThisBookingplatformforrentalcarshasoptionsin160countries,aswellasnillionsofverifiedreviewstoinformtravelers. OpenTable.Booking’spushintothefulltravelerjourneyledittoacquireOpenTable,theworld'slargestrestaurantreservationplatform.Itexistsasastandalonebrand,wheredinerscanmakereservationsonlineatrestaurantsworldwide.   Airbnb Thedominantshort-termrentalplayernowalsooffersboutiquehotelsonitsplatform.Andwhilethepandemichasshifteditsvisionsomewhat,theplatformisnowanOTAthatcompetesdirectly.   Ctrip Untilrecently,CtripwasfocusedprimarilyonAsia.ThischangedwiththepurchaseofTrip.com,whichgaveitaglobalfootprintonmajorNorthAmericanandEuropeanmarkets.   GoogleHotels Okay,sotechnicallythisisnotanOTAasthebusinessmodelisstrictly“payforperformance.”ButGoogleHotelsistheelephantintheroom:amajorcompetitorfromthedominantsearchenginewherethevastmajoritybegintheirtravelsearches.It'smerepresencechangesthecalculusforOTAsworldwide.That'snottosaythatthesesitesareperfect,orthattherearen'tlocalalternatives.Verifiedreviewsaren'talwaysthemostpositive(seesomehere)--butatleastwiththemajorcompanies,travelersaremorelikelytogetresponsivesupportandaccuratepricing,withlesslikelihoodofbeingscammedorotherwisemisled.Forafulllist,checkoutourlistofthetophotelbookingsitesfor2020.   HotelTechReportistheworld'slargestonlinecommunityfortechnologyinsightsanddigitaltransformationstrategiesinthemassivehotelindustryservingover166,000hotelierseachmonth.Wearmhotelownersandmanagerswiththetoolstheyneedtoleveragemoderndigitaltechnologiesandsolvereal-worldbusinessproblems. 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