What Are OTAs in Travel? Here is Everything You Need to Know

OTAs in Travel

When it comes to Vacation Rentals, one word we come across very often is OTA (Online Travel Agency).

You might wonder what’s OTA and the deal about it.

Well, in this blog, we’ll be explaining OTA in detail – its definition, types, benefits and more.

Without further ado, let’s dive in.

What are OTAs?

OTA stands for Online Travel Agency. In layman’s terms, OTAs are websites that act as a one-stop shop for travellers to search, compare, and book a variety of travel products and services.  

This can include flights, hotels, vacation rentals, car rentals, tours, cruises, and even travel insurance. Think of them as the online evolution of the traditional travel agent but with a fair share of convenience.

As per a study by Expedia Group, some travellers purchase multiple trip elements from different travel websites but OTAs are one of the most sought-after platforms. 

And, OTAs pave the way to book trips entirely online, which is something travellers consider important according to Trends Global Survey

How Do OTAs Work?

OTAs act as intermediaries between travel suppliers (vacation rentals, airlines, hotels, tour operators, etc.) and travellers.  

Here’s a simplified breakdown:

1. Travel Suppliers List Inventory: Airlines, hotels, and other travel providers list their available rooms, flights, tours, etc., on the OTA platform.

2. Travelers Search and Compare: Travelers use the OTA’s search engine to find travel options based on their criteria (destination, dates, price, etc.).

3. Booking and Payment: Travelers compare prices, read reviews, and book their chosen travel options directly through the OTA platform. Payment is usually handled by the OTA and then forwarded to the supplier after the traveller’s stay or trip.

Benefits of OTAs

For Travellers

  • Convenience: Travellers can search and book everything from flights to accommodation in one place. 

  • Comparison Shopping: They can easily compare prices and find the best deals across different vacation rentals or travel providers. This is perhaps why they prefer spending more time on OTAs. 

  • Wide Selection: They can access a vast inventory of travel options from all over the world.

  • Customer Reviews: They can read reviews from other travellers to make informed decisions.

  • Secure Booking: They can make payments safely through secured payment gateways. 

For Vacation Rental Owners

  • Increased Exposure: Reach a wider audience of potential guests through the OTA platforms. A study by Expedia Group shows that 80% of travellers use OTAs, leading to a travel purchase. 

  • Simplified Management: Manage bookings and receive payments through the OTA’s system.

  • Marketing Tools: Some OTAs offer marketing tools to help owners attract more guests.

Tour Operators Vs. Online Travel Agencies

OTAsTour Operators
Primarily acts as a booking platformCreate and package travel experiences
Connects travellers directly with suppliersPackages often include flights, accommodation, activities, and transportation.
Often offers a wider variety of travel options but may not create customised itineraries.More personalised touch but may have limited travel options.
Offers the freedom to research and make your own choice. Comparatively less freedom to check everything by yourself

Different Models of OTAs

OTAs don’t charge travellers directly for using their platform. Instead, they generate revenue through a few key models:

  • Commissions: This is the most common model. OTAs charge travel suppliers a commission fee (usually a percentage of the booking value) for each completed reservation made through their platform.

  • Merchant Model: In this model, the OTA acts as the merchant of record. They collect payment from the traveller at the time of booking and then pay the supplier after the trip. The OTA keeps the difference between the sale price and the amount paid to the supplier.

  • Subscription Fees: Some OTAs offer premium memberships that provide travellers with additional benefits like exclusive deals, discounts, or loyalty rewards. These subscriptions generate a recurring revenue stream for the OTA.

  • Advertising: OTAs may also display targeted advertising on their platforms, earning revenue from companies looking to reach potential travellers.

Some Top OTA Platforms

  • Airbnb
  • Booking.com
  • Expedia
  • Vrbo
  • Agoda
  • MakeMyTrip

Revenue Share of Leading Online Travel Agencies (OTAs) Worldwide from 2019 to 2023:

(Source: Statista)

Final Words

OTAs have sparked a revolution in the travel industry, offering travellers the convenience of booking and vacation rental owners to boost their booking. So, if you are a vacation rental owner, listing on OTAs can open another door for more bookings and revenue generation.

When you have multiple vacation rentals to manage and list on OTAs, it can get hectic. That’s where we can help. With mr.alfred in your hand, managing your vacation rental would be a breeze. What’s more, you could seamlessly list all your rentals in all the OTAs in one go. Convenient, isn’t it?

Want to learn more about mr.alfred? Get in touch

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