16 Dec OTAs and tourism: visibility and direct bookings
OTAs and tourism: an inescapable combination in an age of last-minute travel, online booking and increasingly cut-throat competition. But what exactly does OTA mean, and what advantages (and disadvantages) can tour operators gain from the visibility they provide?
We have already extensively discussed the real revolution that digital has brought to the world of tourism. In fact, thanks to the web, it is now possible to book an entire holiday (with transportation, accommodations and experiences) in minutes directly from your computer.
Online travel booking has reached such a scale that already in 2018, 82% of all bookings made worldwide were completed without any human interaction: in other words, without contacting a live travel agent and without personally making contact with the chosen hotel, but only by taking advantage of the possibilities of the web.
Booking a holiday online has become an extremely fast and intuitive process, for which travelers certainly do not need any special skills or explanations. However, the situation is quite different for those in the tourism industry, and there are many things to learn in order to succeed in making the most of the internet’s potential: how to curate their online presence, for example, but also how to reach customers in the right way and, of course, how OTAs work.
If you’ve never heard this acronym before and would like to find out more about OTAs and tourism, fear not: our article today will cover this very topic.
What is an OTA?
When we talk about OTAs, we are referring to the very popular online travel agencies that allow users to book stays and more at very affordable prices.
Before delving into the potential of the combination of OTAs and tourism, however, a distinction should be made between tried and true OTAs and what is known as metasearch engines, another popular tool for comparing prices and booking holidays.
While an OTA allows – or rather, obliges – to finalise the booking directly on the agency’s own site (thus earning a percentage for each reservation made), metasearch engines perform a simpler comparative function: in other words, they allow the user to view the various prices found online for one or more recreational facilities, then allowing the user to finalise the booking on other sites (the facility’s official site or, indeed, the OTA that offers the best price).
Although the difference is less tangible for users, there is actually a very important distinction for tour operators: on average, in fact, the cost of appearing on metasearch engines is far less than that charged by OTAs for each booking.
If the difference is still a bit fuzzy, here’s a concrete example: while Booking is an online travel agency (i.e., it allows users to book directly through Booking, earning a percentage over the total cost of the booking), Trivago is a metasearch engine, in that it merely searches for and displays prices available on other internet sites.
What types of OTAs exist?
Now that you understand the concept of OTAs and their difference from metasearch engines, it’s important to make a further distinction based on the different types of online travel agencies.
Broadly speaking, we can divide OTAs into generalist/horizontal ones, which offer hotels and facilities in various locations and categories (think of the aforementioned Booking), and vertical OTAs, which specialise in a certain “niche” – for example Musement, a booking service for museums and art venues.
This first distinction allows two conclusions to be drawn: on the one hand, the emergence of vertical OTAs allows users to have access to booking services that are increasingly specific and tailored to their individual needs, speeding up the search process and often allowing them to find affordable prices. On the other hand, it is becoming increasingly important for tour operators to make sure that their facility appears on the right OTAs: a youth hostel, for example, will certainly not benefit much from appearing on an OTA that specialises in luxury hotels.
Most popular choices for OTAs and tourism
All this information about OTAs and tourism has probably raised a question for you: which OTAs are the most popular and most chosen by users to book holidays?
First and foremost, of course, is the already-mentioned Booking, with over 700,000 rooms booked every single day and as many as 83 million verified users.
With 25 million users, Expedia instead ranks second, finding particular popularity in the North American and Asian markets.
AirBnb, the well-known alternative accommodation platform as opposed to traditional hotels, has also captured a substantial share of the market in recent years, with more than 200 million guests within a decade.
Of course, these are only the three most popular OTAs, but the list is truly endless: between horizontal and vertical online agencies for different geographic areas and niches, users (and hoteliers) will be truly spoilt for choice.
The benefits of OTAs and tourism
To properly illustrate the potential of OTAs and tourism, it is only fair to analyse the positive aspects of using these services, both for users and tour operators.
As far as travelers are concerned, we must mention the ease of use and variety of choice: instead of browsing the individual sites of facilities separately and comparing prices manually, OTAs not only make it possible to locate the best deals, but also to make a booking directly from the platform. In addition, thanks to the many filters that can be applied, you can refine your search until you find the solution that suits your needs.
Tour operators, on the other hand, find the user base of OTAs particularly attractive, enabling them to reach users from all over the world and significantly increase bookings and revenues.
OTAs and tourism: possible downsides
Of course, like anything, online travel agencies could have downsides, especially for tour operators.
For example, consider the language aspect: being able to reach a potentially global audience, hotels that are present on OTAs must be able to rely on a multilingual online presence to be able to satisfy the requests they receive from customers, so that they can understand and react to private messages, questions and reviews, and to be able to advertise their property in a consonant manner in other languages as well – the latter aspect definitely not to be underestimated.
If you run a hotel business and would like to improve your presence online and on OTAs by offering descriptions and customer support in more than one language, contact us: we will be happy to analyse your situation and design a plan with you that’s adapted to your needs and goals.
