OTA (Online Travel Agency)
OTA (Online Travel Agency) is a third-party website or app that sells travel products — hotels, flights, car rentals, vacation packages, experiences — directly to consumers over the internet. OTAs are intermediaries: they don't own the inventory they sell but earn revenue through commissions, markups, or merchant-model margins.
Major OTAs
The global OTA market is dominated by two groups:
- Booking Holdings — Booking.com, Priceline, Agoda, Kayak
- Expedia Group — Expedia, Hotels.com, Vrbo, Travelocity, Orbitz, Hotwire, trivago
Additional major players include Trip.com Group (Ctrip, Skyscanner), Airbnb, and Hopper.
Business models
- Agency (commission) model — The OTA collects a commission from the hotel after the stay. The hotel charges the guest directly.
- Merchant model — The OTA charges the guest at booking and pays the hotel a net rate, keeping the spread.
- Opaque model — The OTA hides the brand name until after purchase, letting hotels discount without damaging rate parity.
Why OTAs matter to hotels
OTAs provide global reach and marketing scale that individual properties can't match on their own — the so-called "billboard effect." The trade-off is commission cost (typically 15–25%) and reduced direct guest relationships, which is why revenue managers obsess over channel mix and direct-booking strategy.