6 minute read
If you’re wondering what an OTA is, read on. We’re going to investigate this sector of the travel industry in detail.
OTA stands for Online Travel Agency. It describes travel-related online booking platforms that include hotels, car hire, and flights. In fact, the whole process of researching, planning, and eventually booking a trip falls under the category of an OTA.
Why Book Online?
For many years, travel agencies operated in the same way; travelers would visit their local agent and gain access to the exclusive search and booking systems and the host of travel providers. It all seemed to work well, so why did it all change?
Advances in technology and the launch of the internet caused a huge shift in how we connect with others and carry on our daily lives. Everything changed, and travel was no exception. Suddenly, travel companies were presented with a massive opportunity. They could reach a huge online client base at the touch of a button. After the web, there was no going back, and travel agencies had to adapt to the new booking landscape and the demands of a new digital clientele.
Fast forward a few years…….in 2023 the online travel industry was worth a whopping $600 billion.
Is it Better to Book Online or In Person?
The majority of travelers worldwide now book their travel plans online. In fact, 80% of trips globally are booked online, and if you’re a Millennial or Gen Zer, you’re even more likely to turn to online travel resources to book your trip away.
So with OTA’s dominating the travel market, is there still a place for the traditional high street travel agent? And what makes booking online so popular?
If getting the lowest price is your primary focus, then booking online is the best option. By visiting different online operators you can easily source the cheapest provider. OTA’s often win large discounts from suppliers wanting to get their product or service on the OTA’s site. Online agents also win the booking race for those clients choosing unusual trips or wanting to replicate a trip or destination seen on social media; it’s easy to search and find the most obscure when you have the web at your fingertips. The stats report that the average traveler makes 38 website visits before deciding and making a booking – that would take quite a while on foot! And then there’s those all-important reviews. Nowadays, checking out the reviews and ratings from previous travelers is an important part of the decision process, and there’s always lots of people keen to share. Everything from rave reviews, useful information and of course complaints is available to view. Online bookers also benefit from the convenience of booking a trip anytime, anywhere. The global travel industry is available 24 hours a day, anywhere with an internet connection. So it’s easy to see the benefits of booking using OTAs.
But despite all of this, a large section of travelers still prefer the ‘in-person’ booking experience. And there are good reasons to choose this option.
If you have a big trip planned, you may feel more secure booking in person so that all aspects of the trip can be discussed face to face. Complex logistical problems can be solved easily with an expert to hand, and they will often have valuable specialized knowledge to take advantage of. Travel agents usually offer expert guidance from their own experience – their decision to opt for a career in the travel industry has no doubt come from a love of travel, and travelers can benefit from their passion and advice. Finally, some travelers may simply feel more at ease allowing an expert to take care of the booking, and while this may cost a little more, their peace of mind makes it worthwhile.
Answering Your OTA Questions
You probably have some burning questions about online travel agents, so let’s answer a few of them here.
Do online travel agents receive discounts?
Yes! OTA’s can often offer fares much cheaper than standard travel agencies. In some cases the price is lower than on the airline or hotel website. This is because suppliers will offer big discounts to the OTA, to get their offering online, and available to the large OTA client base.
How do online travel agents make money?
OTA’s generate income from several sources:
- Commission – bookings made for airlines, hotels, and other providers will earn a commission. The supplier pays the commission to the agent in return for their services
- Advertising and promotions – some companies will pay to advertise their product/service on the agents’ website
- Service fees – sometimes agencies will make an extra charge for itinerary planning or specialized assistance
Is it cheaper to book with a travel agent or online?
OTA’s can usually offer bigger discounts than traditional travel agents, as their business operates without many of the overheads suffered by bricks and mortar agents. Also, travel providers will often offer large discounts to be included in the OTA’s search and booking platform.
Are online travel agents (OTAs) regulated?
In the US generally, there is no testing, training, qualification or licensing process to become a travel agent or an online travel agent. Any regulations and accreditations are the same for bricks and mortar and OTA’s.
However, there are four states that require agents to register as a seller of travel and the law also states that sales may require consumer financial protections. A number of other states also have their own regulations, and it’s advisable to contact the local Chamber of Commerce to check what licensing requirements operate in a particular area.
Despite this, many agents decide to become certified with travel associations, such as the American Association of Travel Advisors (ASTA) and The Travel Institute, to add credibility and assurance to their client base.
Cost savings, convenience, flexibility, and more attract millions of travelers to OTA apps and websites for their travel booking needs. The industry is booming, and this is set to increase. Whether you’re an established agent or a start-up, Traveltek’s easy-to-use search and booking solutions can help harness and retain clients, offering a seamless booking experience. Our particular expertise within the cruise industry offers cruise tour operators a tailored booking engine within this lucrative sector.
