What is an OTA in Travel Industry: Business Partner for Hotel

The complete form of OTA is an Online Travel Agency. OTA is an online travel marketplace that makes everything easier and more accessible. Basically, OTA is a web-based travel and accommodation marketplace. 

Who doesn't like to travel? The concept of OTA is to be a mediator between audiences and hotel property or travel service providers. Popular OTA travel company such as expedia.com and booking.com. 

Using the OTA platform, audiences can research and compare multiple ranges of hotels, air tickets, and travel destinations under one platform.     

Online travel agencies offer multiple services such as car rental, hotel booking, flight booking, different travel packages, etc. 

In this blog, we will explore what is an OTA in travel is and how it helps reach a wide range of global customers. 
What is an Online Travel Agency (OTA)?

The main aim of an online travel agency (OTA) is to assist travellers in researching and comparing multiple ranges or types of hotels, car rentals, flight ticket bookings, and cruise bookings under one marketplace. 

Moreover, this OTA is considered to be a search engine for travellers. An accessible travel accommodation marketplace to find a place or property anytime and from any place. 

Besides, online travel agent push the whole travel & tourism industry to gain better online visibility, higher customer reach, and faster booking. OTA platforms help numerous hotels, flight companies, and car rental companies to do promotions on their behalf. 

It's been proven through different surveys, such as the Cornell study, that almost 93% of customers depend on research on various OTA platforms to make the final decision. And there is always a invisible competition between ota vs travel agents.

Moreover, the phocuswright also claimed that almost 64% of hotel & lodge companies use OTA for promotional campaigns and to increase online visibility. 

Image source: Phocuswright 

Top OTA In The World

1. Booking.com 
2. Expedia 
3. Agoda
4. Airbnb
5. Tripadvisor.com
6. Google hotel Ads 
7. Trip.com 

OTA Business Model- Travel Agent Booking Sites

Almost every hotel, car rental, flight/bus, or lodge outsources used  OTA marketing strategy. And to promote the OTA platform, it uses 2 types of business models: merchant model and agency model. 

• The Merchant Model

Basically, a deal happens between hotel administration and different OTA platforms. An OTA is given a set of rooms and instructed to sell cheaply but must meet the profit scale. 

The hotels that follow the merchant model will work as a merchant and collect payment from hotel guests while booking. And after the guest checks out from the hotel, the OTA platform will pay a certain percentage to the hotel. 

• The Agency or Commission Model

The agency model applies to hotel guests who book through the OTA platform without payment and pay to the hotel directly. 

Hoteliers later pay the OTA platform a certain percentage of the commission in this situation. Rather than that, no types of deals happen between hoteliers and OTA platforms.

Why Listing on an OTAs Is Important?

Listing Online Travel Agencies (OTA) is essential for several reasons, particularly for businesses in the travel and hospitality industry. And it's impossible for hoteliers to do more prominent marketing, which is why OTAs are there to help. 

• Increased Visibility

OTAs have a broad reach and a large user base, providing your business with increased visibility. This exposure can be especially beneficial for attracting new customers and reaching a global audience.

• Access To A Larger Audience Base

OTAs attract a diverse range of travellers, including those who might have yet to discover your business through other channels. This diverse customer base can lead to increased bookings and revenue.

• Hotel Marketing Strategies

OTAs invest heavily in marketing and promotional activities. By listing on these platforms, your property or services benefit from the OTA's marketing efforts, including online advertising, social media campaigns, and partnerships.

• Competitive Advantage

Travellers often use these platforms to compare options and make decisions, and having a presence on well-known OTAs can contribute to your business's credibility.

• Hotel Pricing Strategies

This flexibility enables you to adjust your rates based on factors such as demand, seasonality, and competitor pricing, optimising your revenue.

• Hotel Direct Booking Capabilities

Leveraging these capabilities can enhance the efficiency of the booking process for both you and your customers.

• Customer Reviews

Many OTAs feature customer reviews and ratings. Positive reviews can build trust and influence potential customers, while negative feedback provides an opportunity for businesses to address concerns and improve their services.

• Mobile Accessibility

With the increasing use of smartphones, OTAs typically offer mobile apps, making it convenient for users to browse and book accommodations on their mobile devices.

How Do OTA Work With Property Management Software (PMS)?

Online Travel Agencies (OTAs) often work simultaneously with Property Management Software (PMS) to streamline the booking and management processes for hotels, vacation rentals, and other accommodation providers.

However, the equation between OTA and PMS is very simple and easy. OTAs' main task is to list all the hotel properties and then advertise using different hotel marketing strategies.

Besides, the task of the PMS platforms is to maintain the daily operation of those listing properties. 

Why Should Hoteliers Need To Work With OTA?

The travel and tourism industry is very competitive, and it's difficult for hoteliers to promote broadly in every form. 

The travel & tourism industry is very competitive; attracting and achieving customers on a large scale is hard unless the hotel is a franchise hotel like Radisson Blu, Sheraton,& Hampton by Hilton. 

The main motive of OTA is to promote different hotel properties on their platform. Bring down multiple types or ranges of hotel properties under one platform so that travel enthusiasts can find and compare them all at once. 

Basically, a type of contract happens between the hotelier and the OTA platform; the OTA will showcase the hotel room view, room, bed, breakfast menu, room's window view, hotel swimming pool view, amenities description, hotel restaurant view, gym room and other available areas. 

However, online travel platforms only make money when any hotel gets directly booked from their marketplace. 

Even being an open travel marketplace to access any hotel-related market data, an online travel marketplace provides the most secure, fastest SERP and also a filtered result for any type of niche. 

• Better Visibility Because Of Billboard effect 

It's been discovered through a Cornell University study that most potential customers research multiple OTA platforms and then make the final decision. Indeed, it's also true that listing on OTA platforms brings direct traffic to the properties' websites. 

Moreover, it's been found that approximately 75% of people make direct bookings from hotel websites after analysing multiple OTA platforms. 

• Invest in Online Marketing 

OTAs such as Booking.com and Expedia.com invest millions of dollars in digital and traditional marketing. OTA's main aim is to spread awareness & attract audiences all around the world. 

OTA is the best platform for low-risk takers, with high growth potential and low promotional costs. Online travel marketplaces use TV advertisements, billboards, sponsorships, social media platforms, and other marketing channels to promote hotel properties. 

• Target high-value Customer 

OTA helps thousands of hotel properties to promote their property broadly and reach hard-to-reach customers. Also helps to retain the highly valued or elite or business class customers experience so that they keep the cancellation tendency low and be repeat customers. With OTAs, hoteliers can maintain the average daily rates and offer a low price to longer-staying guests.  

• Free Analytical Tools & Insights 

Indeed, the online travel marketplace is a free & open analytical tool to compare multiple options and choose the best option for them. Besides, OTA is an open platform to research different experienced guest reviews, price comparisons, and visual views of the hotel & rooms. Hence, it's easier for the travellers to make the final decision and also for the hoteliers to improve themselves. 

Factors You Should Consider When Choosing An Online Travel Agency

There are multiple online travel marketplaces, and each shows different hotel properties & different discount offers. Also, different OTAs show different niche-related properties, specifically based on previous travelling records. 

• Target Audience 

Based on the user experience & travel history, OTA suggested the hotel property criteria, location type and price range. That's how OTA constructs their UX & UI and serves the targeted audience. OTA uses another promotional campaign, such as a "pop-up survey form", to understand the taste of travelling. 

• User Experience Of The Guest 

Of course, UX & UI matter a lot for every OTA because travellers spend a lot of time looking for the best option. Travellers search, browse using different keywords, and compare the market based on price, hotel facilities, room size, etc. 

• List Of Features Offered to The Partners 

Not only does online travel agent work as a search engine to offer travellers different hotel types and ranges of hotel properties, but it also works as an analytical tool to compare the pricing range and hotel offers. OTAs are integrated with different hotel channel managers, thus getting a smooth booking procedure and the risk of overbooking errors. 

How Much Does It Cost To List On OTA Platforms?

The cost to list on travel Agent booking sites can vary widely depending on the platform and the specific terms of the agreement. Online travel company typically charge hotels, vacation rentals, and other accommodation providers a commission based on the room rate or booking amount. This commission can range from around 10% to 25% or even more.

Additionally, some OTAs may have other fees or charges, such as setup fees, subscription fees, or fees for premium placement and visibility on their platform. These fees can add to the overall cost of using the OTA.

It's essential to carefully review the terms and conditions of each OTA and negotiate the best possible deal for your business. Keep in mind that the popularity and reach of the OTA, as well as the specific features and services they offer, can influence their pricing structure.

Common OTAs include Booking.com, Expedia, Airbnb, and others. Each platform has its own pricing model and fee structure, so it's crucial to do thorough research and consider your business's specific needs and goals before deciding which OTAs to partner with.

Conclusion

Since we are at the end of the blog, I hope you are clear about what is an OTA in travel industry. 

Online travel marketplace is the best digital platform that facilitates the booking and reservation of travel-related services(accommodations, flights, car rentals). 

OTAs act as intermediaries between consumers and travel service providers, offering a centralised platform for users to search, compare, and book various travel products.