What is an Online Travel Agency and Why Should You Care?

An OTA or online travel agency is an internet-based marketplace that caters to travel-related products and services. Consumers who opt to book travel via online travel agencies can easily research a slew of travel needs such as flights, tours, hotels, vacation rentals, cruises, attractions, restaurants, and car services—direct from travel suppliers. There are millions of travelers across the globe who rely on OTA websites to plan their leisure and business trips.

Advantages of Working With OTAs

There are many advantages to working with an OTA:

  • They are a cost-efficient means of marketing and selling travel-related services.
  • Lower costs on online-based marketing expenses since an OTA already does that for you.
  • Reviews are unbiased, allowing customers to book with confidence.
  • Users can compare the cost of accommodations, tours, etc., with ease. 
  • Better visibility on Google and other search engines thanks to the marketing techniques implemented by OTAs.
  • Reach a larger target audience, which results in more bookings from new guests.
  • Easy to develop consumer trust, which is highly beneficial for newly launched businesses.

OTA websites provide any of your would-be guests with access to various locations and at volumes that would otherwise be difficult to gather on your own. More importantly, it allows the use of tools and marketing initiatives that can best target travelers while ensuring secure and properly processed bookings, streamlined communication with guests, as well as a means for you to manage reviews. 

Another thing that’s great about OTA’s is the large audience reach it can afford users. OTA partners get to enjoy access to new consumer groups that otherwise may not have considered them in the first place. 

Consider this, numerous people who are looking to travel out of their country for the first time are bound to use online travel agents. The reason behind it is simple: consumers have come to trust OTA websites to provide them with a list of trusted sources, making their platforms an easy to choose one-stop-shop for both the novice and seasoned traveler. 

Disadvantages of Working With OTAs

Along with the many advantages, there are also some disadvantages:

● Most OTA’s charge a fee or commission for every booking

● Cancellation terms are limited and restrictive. 

In addition to commissions, the biggest issue you may have with an OTA is the diminished control over their bookings. By using travel agency platforms on the web, you agree to the terms and conditions of the service provider. Oftentimes, this could include the inability to manage a booking as you deem fit. 

Regardless, many have found that using an OTA to help run their travel business results in more people choosing to book direct on your business website after stumbling across your brand on the OTA platform. There is no discrediting the fact that many online users tend to view supplier sites as accurate and trustworthy.

How Do Online Travel Agencies Work?

Currently, there are three main models that OTAs use.

Merchant Model

An OTA is sold a service at a discounted rate. The OTA then resells this to a consumer at a marked-up price to profit from the transaction. This is your basic reseller or merchant model. Many companies, even those outside of the travel industry, have been engaging in this practice for ages.

Agency Model

The Agency Model functions on a commission system. In this model, an OTA will act as a partner who is licensed to distribute a service. Once the booking is completed successfully, the OTA will receive their share of the profits. Business owners receive customer payments directly without having to wait for the third party to transfer the payments.

Direct Booking Model

Some OTAs such as TripAdvisor enable consumers to learn more information and book direct from the business website after first learning of the business on the OTA website. OTAs with this model often charge an annual or monthly membership fee. 

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Choosing the Right OTA Relationships

Finding an OTA is not at all difficult. With just a few clicks, users will easily find a selection of online travel agencies. The question now is, how do you find the right one for your brand? 

Know Who Your Guests Are

To begin with, know your target audience. Now, cross-check that with the market an OTA caters to. Though travel is not bound by age,  gender, etc., you will be surprised to find that certain travel platforms appeal to a specific set of travelers. For example, Booking.com tends to attract no-nonsense users because the site is easy to navigate and straightforward. Tripadvisor works best for travelers who are experience-centric, while Airbnb appeals to those who prefer accommodations that veer away from the traditional hotel setup. 

Demographics play an important role in finding an OTA. As a business owner, you know the geo-specific guests your hotel, resort, or B&B tends to have. In line with this, there are OTA’s that will cater best to your geographical location. Similarly, some do not. To get top results with the OTA you are thinking of signing with, check the platform carefully.

Be Exclusive to the Right Platforms

Work on one or two online travel agencies. Joining every available OTA can prove to be more disastrous than helpful. Businesses who are new to online agencies can reap better rewards by focusing on a smaller market. It should be noted that many of these sites require users to manually manage. This can be especially challenging when it comes to booking calendars. 

Signing with all agencies can lead to multiple bookings for the same dates since the syncing functions for calendars are nonexistent or still filled with bugs. Master the use of one OTA before expanding to others. 

OTA sites tend to update their TOS as well as upgrade functions on their platforms. What used to work before may become too tedious to deal with after a version 2 rollout. Additionally, it would help to evaluate certain services afforded to you. Customer support, refunds, payouts, and the like are some examples that could make or break your relationship with an OTA.

Who Are The Top OTAs for Experiences?

Tripadvisor Experiences 

https://www.tripadvisor.com/ExperiencesInsights/what-is-tripadvisor-experiences

Already a recognized name in the travel industry, TripAdvisor has now branched out after it managed to procure Viator in 2014. This travel industry icon offers tours and activities and, at the same time, allowing vendors to use the platform to sell their services. 

Benefits 

TripAdvisor Experiences sits firmly on a reputable throne built by many years in the travel spotlight. Because the company owns both TripAdvisor and Viator, users get to enjoy cross-network visibility.  

Disadvantages 

The brand recently announced a standardized commission rate based on product and destination. This dynamic approach to pricing has been met with disbelief and could be the undoing of the site. 

Get Your Guide

https://www.getyourguide.com

The Berlin-based start-up for OTA experiences, GYG (Get Your Guide), is fast becoming one of Europe’s leading travel related platforms. The brand focuses on activities and tours that are very Instagrammable. It’s the perfect site for travelers who are social media-centric. 

Benefits 

A haven for businesses that cater to the millennial and Gen Z traveler, GYG has become the go-to place for finding hidden gems that are very share-worthy. 

Disadvantages

Like many before it, GYG is slowly capitalizing on making their own experiences, making it challenging for experience providers to compete. Since the site has access to tons of users’ data, it makes it easier for them to better target their audience. 

Airbnb Experiences

https://www.airbnb.com/s/experiences

The brainchild of the widely popular platform for unique lodgings, Airbnb Experiences was launched in 2016. The goal was to offer interesting experiences to Airbnb fans that would go along nicely with their accommodations.  

Benefits 

What makes Airbnb Experience stand out the most is the local nature of its setup. The site is ideal for owners of small businesses. A great starting point for those who are beginning their journey in the travel accommodations field, this site is an easy way to getting things started. 

Disadvantages

In comparison to other sites, there is no minimum headcount. This could mean having to continue on with an activity or tour, even if only a single person shows up. It’s a bit of a risk and can prove to be costly.

Expedia Local Expert

https://www.expedia.com/p/info-other/local-expert-desk.htm

One of the world’s largest platforms, the site launched in 2014. It boasts of an extensive lineup of tours and activities. 

Benefits

Businesses that belong to Expedia LX (Local Expert) get access to a large audience. That’s 30 countries, 60 booking sites, and 17 languages to get your brand introduced to travelers in many locations.

Disadvantages 

Though established in the realm of OTAs, Expedia’s website and mobile app are sorely lacking upgrades making them appear outdated compared to many of their competitors. 

Viator

https://www.viator.com

Founded in 1995, long before TripAdvisor acquired it, Viator was slowly attracting users in search of activities and experiences to add to their trip. This web marketplace still continues to draw worldwide interest from both travelers and sellers. 

Advantages 

Like TripAdvisor Experiences, Viator gets to enjoy features on a multi-network level. It’s most recent reorganization can significantly boost the marketing budget of the brand. 

Disadvantages 

Whether Viator will be able to bounce back after living in the shadows of TripAdvisor is still uncertain at this point. With more competition to deal with, only time will be able to determine if Viator can rise from the ranks.

Who Are the Top OTAs for Accommodations?

Booking.com

https://www.booking.com

One of the oldest travel agents on the internet, Booking.com paved the way for many online travel agencies. Headquartered in the Netherlands, the site covers over 200 countries worldwide. The site caters to hotels, motels, holiday rentals, and similar accommodations. 

Benefits

They have over 20 years of experience to back them up. Partners get to grow their business with tried and tested site tools and services. 

Disadvantages

Since they have been around for quite some time, the site is saturated with lots of sellers. Industry infants can end up in the shadows.

Hotels.com

https://www.hotels.com

Headquartered in Texas, users can book anything from hotels, condos, inns, etc. What most do not know is that hotels.com is owned by the Expedia Group. 

Benefits

OTA partners need not spend a lot on advertising. Hotels.com has many targeted adverts that ensure businesses get their fair share of coverage.

Disadvantages 

A business webpage is still necessary, and relying solely on an OTA like hotels.com is never a good idea.

Airbnb.com

https://www.airbnb.com

Unlike the other online travel agencies, Airbnb thrives mostly in providing homestay type lodgings, a unique niche that has successfully attracted travelers who are tired of the usual hotel room setup and prefer a homier atmosphere. 

Benefits 

Airbnb is very user friendly. The site is simple and easy to use. Finding a budget-friendly bed and breakfast, hut, condo, tiny home, and even a yurt can be done on this site. 

Disadvantages 

Their Superhost rewards program is highly dependent on aspects like reviews—something you cannot force guests to do. Thus, if your review rate is lower than the set standard, the business will not be a part of this elite Superhost status.

Expedia.com

https://www.expedia.com

A big player, Expedia.com belongs to the Expedia Group that also owns several other subsidiaries. Founded in 2001, Expedia is based in Washington. This top grosser has millions of loyal users who enjoy the site for its affordable rates either as a traveler or as a business owner.

Benefits 

It’s a reasonably complete website with everything from accommodations, car rentals, flights, and experiences. For the traveler who needs one site to cover all their needs, Expedia is the site to visit. On the side of a product or service provider, you get massive exposure.

Disadvantages 

Competition is fierce. Since there are so many travel businesses on it, newer additions should make an effort to stand out.

Orbitz.com

https://www.orbitz.com

Powerhouse OTA and metasearch combo, Orbitz is another Expedia subsidiary that offers accommodations.

Benefits 

You get more time in the spotlight since your main competition is just other listings within the US.

Disadvantages

Orbitz is geared primarily for the American market making it useless if you are located elsewhere.

Travelocity.com

https://www.travelocity.com

One of the oldest and most trusted travel sites on the internet, their business model focuses mainly on offering packaged deals. 

Benefits 

Great for those who are looking to provide several services in one go. Accommodations packaged with a car rental? List it on Travelocity and watch travelers snap it up.

Disadvantages 

Travelocity is another site with a lot of established competition. If you are up for the challenge then it shouldn’t be a problem.

Priceline.com

https://www.priceline.com/

As a subsidiary of Booking Holdings, Priceline caters strongly towards discount travel aficionados. Travelers can toggle and filter settings to find the best deals. 

Benefits 

Customer turnover is quick because everyone loves travel deals. 

Disadvantages 

You don’t get as many tools that are available on other sites. Your business will encounter a lot of bargain hunters.

Kayak.com

https://www.kayak.com

Another member of Booking Holdings, one should not expect less from this all in one booking website.

Benefits

Offers low-cost opportunities to advertise your listings.

Disadvantages 

Lesser-known booking site. Competition is manageable but customer reach may be smaller.

Best Practices For How To Work With OTAs

Profile Completion

It may seem insignificant or obvious to have a profile that is complete. There are, however, lots of individuals and businesses online that neglect to provide ample detail under the profiles. Use descriptions that are optimized with keywords that will in turn generate traffic and bookings to your accommodation. 

While you are at it, label it aptly. Don’t just be content in labeling yourself as an accommodation, select every synonym that correlates to the nature of your product or service. This practice ascertains that your listing can easily be located on an OTA – also when someone conducts a web search.

Studies have shown that a large chunk of internet visitors are visual browsers. Add images and even video clips (if possible) to entice potential customers. There is, of course, a fine line between a tasteful number of clear images and spamming. Make sure not to cross that line. 

Rates and Promos

Not one person would turn away a good deal. Manage your rates and promotions accordingly. During the off-season in your area, consider offering discounted rates, freebies, or packages that will blow the competition away. 

Respond to Customer Engagement 

Good communication does not begin and end when a person books your place. Engaging with guest queries in a friendly and positive manner is a must when working in the travel industry. Refrain from using any comments that are negative. Approach every guest interaction in a calm and happy manner. When someone leaves a review, respond and show your appreciation. Doing so encourages repeat customers as well as invites new ones through your approachable demeanor. 

Paid Advertising

Yes, lots of bed and breakfast owners prefer to keep the costs of advertising very low if they cannot get it absolutely free. However, it bears considering some paid placement promotions online travel agencies offer their members. You can choose to be promoted via email blasts, banner ads, or priority placement. The great thing about this is that you can take advantage of paid advertising packages that will fit your budget. 

Manage OTA Performance

Make it your agenda to regularly assess how your business is performing on an OTA. Go to your dashboard to view the graphs and charts that show analytic data. Figure out which areas need improvement. Are you getting enough clicks? What about new visitors? Do you get repeat guests? More importantly, what is the rate of visitors that actually proceed with a booking. With this info on hand, you can play around with pricing, offer discounts, or change up a few things on your listing just to freshen it up. Regularly monitor your progress in order to make the most of the tools OTA partners provide you with. 

Conclusion

All in all, the use of an OTA or several agents online can be very beneficial for business owners. Even with the fees that come with using the service, it has been proven that these platforms give your product a more extensive reach.

OTA use may take some getting used to. For this reason, it is advisable to go slow. Select amongst the available options and choose online travel agencies that are easy for you to manage. It may take a bit of tinkering to find which one has the most services that align perfectly with your business beliefs. 

While many OTAs charge a commmision, these fees only occur when a booking is successfully made. If you compare this cost to that of marketing your own business, you may find that the relative cost per booking is similar and often lower than your own marketing costs. In this case, OTA’s represent and fast and cost effective way to market your business.

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Frequently Asked Questions

Is an online travel agency cheaper than direct booking?

Upfront, it seems to be a costlier option. However, when partnered up with the right OTA, you save on advertising and marketing, thus providing you with more significant savings in the long run.

Is TripAdvisor an OTA?

TripAdvisor offers minimal OTA services like direct hotel bookings.

Does listing your experience on OTAs help with SEO?

Yes it does! Online travel agencies act as a vehicle to promote your listing while also driving direct traffic to your website.

How can you stand out from the competition on OTAs?

Maintain a listing that is updated. Replace old images, reword your descriptions, offer deals, and always engage with old and new guests.

Meet the Author:

Carl Lefever

Carl Lefever, Founder & Strategist

Carl is the founder of Improve & Grow, LLC, where his primary passion is helping businesses grow by improving their online marketing. He leads the team and is involved in developing and executing internet marketing strategies for our clients. Carl's background is in continuous improvement disciplines, focused on sales and marketing operations. He is a certified Lean Six Sigma Master Black Belt. He is a proud father of 4 girls and loves traveling and supporting missions work.