Selling your property through online travel agencies (OTAs) can be a complicated endeavour, especially if you do not have a Revenue Manager  to take care of it. 

In this guide, we’ll explore how you can best utilise OTAs as lucrative marketing channels for increasing your reservations.

At the end, see our breakdown of OTAs at a glance and compare them to see which OTAs you should use for your business and hotel goals. 

Online travel agencies, or OTAs, were originally designed to sell excess inventory in times of low demand. Today, OTAs drive the majority of hotel bookings worldwide, they are considered as a major source of revenue for most hotels.

 

Why guests use OTAs

 

OTAs such as Expedia and Booking have become sophisticated marketing channels for hoteliers of all sizes.

Never before have consumers been able to easily compare different travel options in terms of price, time and location. 

These platforms offer access to markets that were previously unreachable by small hoteliers and hotel owners.

Online travel agencies offer consumers a versatile experience. 

Not only can they showcase the multitude of travel options, but they also offer reliable reviews and accurate local information. 

OTAs have created their own brands that consumers trust and recognise as opinion leaders. Hoteliers leverage the OTA brand when they list their properties with them.

 For example, Lonely Planet reviews each of their properties individually.

Guests rely on their expert, first-hand opinion. Or, travel sites like Expedia guarantee low prices and travellers know they are getting the best deal.

 

The Big Players

 

Four major brands control the OTA market. Expedia, Priceline, Orbitz Worldwide and Travelocity control approximately 95% of the market in the US, according to Forbes.

 Expedia also owns hotels.com, which has 16 million monthly users. Priceline, which has 40 million monthly users, owns Booking.com.

Booking.com is by far the largest player in the OTA space. 

While it is difficult to penetrate the market as an OTA competitor, the saturated market works in the hotelier’s favour. Both consumers and hoteliers can benefit from the large companies’ extensive resources and capabilities.

 

 

There is a place for OTAs

 

OTAs provide resources that are simply not available to most hoteliers. Many see OTAs as distribution channels, but they offer more than extended reach.

 OTAs create culturally appropriate online experiences. This includes currency conversions, language support and personalised experiences based on shopping habits.

 OTAs offer hoteliers access to non-brand loyal travellers, younger travellers and the packaged traveller. Hotel loyalty members only represent 43% of the total adult leisure traveller market in the US. 

 Therefore, there is a huge opportunity for OTAs to work for the smaller hotelier.

 

Use OTAs Wisely

 

According to PhoCusWright, hoteliers should look at distribution and marketing costs. Hotels spend 6-9% of their revenue on sales and marketing, while OTAs spend 35-40%. 

When a room is booked with an OTA, it is incorrect to assume that the booking would have occurred without the OTA’s involvement. It is also wrong to assume that such bookings do not create future booking opportunities.

 Own websites have their place in the market. But, a successful marketing distribution strategy effectively balances distribution.

 Creating a profitable distribution strategy is important for all property types, and is a combination of OTA connections and direct bookings.

 

How to choose OTAs that suit your Hotel

 

Disclaimer: We compiled the following from publicly available information that may change at any time.

 Use this guide for reference only. Please contact OTAs directly to verify information before making any business decisions.

 

 

Airbnb helps travellers live like locals.

• Total number of guests: 260 millions
• Number of listings: 7 millions
• Number of countries: 220 (100.000 cities)
• Countries / Regions where most prominent: Global
• Commission rates: Host service fee of 3% each time a booking is completed on their online platform.
• Charge guests a service fee to cover the cost of running the site.
• Other fees: Depending on the laws of the jurisdiction involved, VAT on service fees may be included as an additional amount on top of the total service fee of 3%.
• Any operating restrictions: N / A.
• Source: www.airbnb.com

 

 

 

Vrbo (Vacation Rentals By Owner)

• Number of active users: millions (unspecified)
• Number of listings: 2 million
• Number of countries: 190
• Countries / Regions where most prominent: Worldwide
• Commissions: 8% on every booking.
• Other fees: monthly or annual fee for unlimited listings
• Guests service fee: from  6% to 12%
• Source: www.vrbo.com

 

 

Booking.com is the most popular online travel website. There are over 200+ millions verified reviews and counting, as listed on their website.

• Number of active users: 3+ Billion
• Number of listings: 28 millions
• Number of countries: 220 
• Countries / Regions where most prominent: Global
• Commissions: starts at 15% per booking, but increases based on a variety of factors
• Other fees: N / A
• Source: www.booking.com 

Trip.com (previously known as Ctrip) is China’s leading travel website and dominates its local market.

• Number of active users: 400+ millions 
• Number of listings: 1.2 millions
• Number of countries: 200
• Countries / Regions where most prominent: Asia
• Commissions: minimum 10% and up to 25%.
• Source: www.trip.com

 

 

FlipKey is an online marketplace for vacation rentals that’s owned by Tripadvisor.

• Number of active users: millions (specific number not available)
• Number of listings: 300+ thousands
• Number of destinations: 11 thousands cities
• Countries / Regions where most prominent: mainly North American and European, but offers many global listings
• Commissions: 3% commission on every booking guaranteed through FlipKey 
• Other fees: N / A
• Any operating restrictions: advertise everything from private rooms to castles, houseboats and villas. Travellers book on FlipKey and TripAdvisor because they are looking for something that a hotel cannot provide.
• Source: www.flipkey.com

 

 

 

Hostelworld, focused on the hostel market

• Number of active users: 10+ millions
• Number of listings: 17+ thousands 
• Number of countries: 179+
• Countries / Regions where most prominent: Europe and Asia (with global listings)
• Commissions: between 12% to 25% for each booking that is made through their website
• Other fees: N / A
• Any operating restrictions: N / A
• Source: www.hostelworldgroup.com

 

Hotels.com,  offers the widest selections of accommodation on the net, including both independent and major hotel chains

• Number of active users: 53 millions 
• Number of listings: 325 thousands
• Number of destinations: 19+thousands
• Countries / Regions where most prominent: Global
• Commissions: from 10% to 20%
• Other fees: N / A
• Any operating restrictions: N / A
• Source: www.hotels.com

 

 

 

Lonely Planet  is a large travel guide book publisher

• Number of active users:10 millions
• Number of listings: 500+ thousands
• Number of countries: N / A
• Countries / Regions where most prominent: Mostly Europe
• Commission rates: No business can pay to be listed in any Lonely Planet product​. Lonely Planet listings are created independently.
• Other fees: N/A
• Any operational restrictions: N / A
• Source: www.lonelyplanet.com

 

Orbitz is a travel fare aggregator website and travel metasearch engine

• Number of active users: 11+ millions per month
• Number of listings: N / A
• Number of countries: N / A
• Countries / Regions where most prominent: Global
• Commissions: 10% +
• Other fees: N / A
• Any operating restrictions: parity agreements in most countries
• Source: www.orbitz.com

 

Travelocity is an online travel agency owned by Expedia Group

• Number of active users: 14+ millions per month 
• Number of listings: 510+ thousands
• Number of countries: N / A
• Countries / Regions where most prominent: Global
• Commissions: between 10% to 15%
• Other fees: N / A
• Any operating restrictions: Parity agreements in most countries
• Source: www.travelocity.com

 

Expedia  is one of the world’s leading full-service online travel brands

• Number of active users: 24+ millions 
• Number of listings: 3+ millions
• Number of countries: 75
• Countries / Regions where most prominent: Global
• Commissions: up to 25%
• Other fees: Increased commission rates with packages
• Any operational restrictions: parity agreements in most countries
• Source: www.expedia.com

Priceline is a travel accommodation booking website

• Number of active users: 20 millions per month
• Number of listings: 2+ millions
• Number of countries: 200
• Countries / Regions where most prominent: Global
• Fees: Sliding scale
• Other fees: N / A
• Any operating restrictions: parity agreements in most countries
• Source: www.priceline.com

 

With all the different online travel agencies to choose from, we have created a short list of the ones you should join based on your property type.

 

OTA for every type of Hotel

 

 

 

Bed & Breakfast (B&B)

 

Bed and Breakfasts are small accommodation establishments that offer guests a unique and quirky experience.

B&Bs are perfect for romantic getaways, the adventurous traveller and guests looking for a relaxed and unique experience.

B&Bs are more likely to attract wealthier guests.

Because B&Bs tend to be smaller than independent hotels, it is important to choose OTAs with low commissions.

OTAs focused on unique experiences are also important.

 

Low commission

• Airbnb
• VRBO
• Flipkey
• hotels.com

 

 Superior commission but prominent presence

• Expedia
• Hostelworld
• Booking.com
• Orbitz
• Priceline
• Travelocity
• Lonely Planet

 

Hostels

 

Hostels are perfect for backpackers, adventure travellers, solo & budget travellers.

Hostels are ideal for multi-location travel, large groups and small budgets.

These types of places should focus on OTAs with low commissions and specific target markets.

• Hostelbookers
• Hostel Culture
• Hostel World
• Lonely Planet

 

 Vacation Rentals

 

These are properties that rent out the whole house or a complex of houses.

They are perfect for couples, honeymooners, families and groups.

Although the property has a higher price tag, the ability to accommodate many people makes it an inexpensive alternative.

Holiday rentals should avoid high commission OTAs and focus on travel websites with low commission models.

• Airbnb
• Flipkey
• Vrbo

 

Boutique Hotels (from 10 to 99 rooms)

 

Boutique Hotels generally attract all types of guests.

Couples, families and solo travellers frequent boutique hotels for their comfort and unique charm.

These tourists want to be rooted in the local culture and have the inside scoop.

Boutique hotels should focus on niche OTAs with low commissions. Limited use of more expensive OTAs is also plausible.

• Trip.com (if targeting Asian guests)
• Flipkey
• hotels.com
• Hostelworld
• Lonely Planet

 

 Hotel Chains

 

Hotel chains include companies that own between 3 and 10 large, luxurious properties.

These types of properties also attract different types of guests.

Travellers who appreciate unique experiences in luxurious surroundings.

These travellers want to feel local and have the scoop.

They should focus on low commission niche OTAs, but also use more expensive OTAs when it´s necessary to move inventory.

• Booking.com
• Trip.com (if targeting Asian guests)
• Expedia
• Hotels.com
• Lonely Planet
• Orbitz
• Priceline
• Travelocity

 

Big hotel chains

 

Often have more than 100 rooms that are quite cheap. They attract many different types of guests. They have presence in hundreds of countries around the globe and offer different types of accommodation and brands.

• Booking.com
• Trip.com (if targeting Asian guests)
• Expedia
• Hotels.com
• Lonely Planet
• Orbitz
• Priceline
• Travelocity

If you need help setting up the main OTAs, see our article on how to connect OTAs with a Channel manager here.

 

Conclusion

 

Online travel agencies offer many opportunities for owners of all kinds.

From extended reach to extensive consumer information, OTAs are very important to consumers.

Not all OTAs are suitable for all hotels.

By analysing each OTA and identifying what works best for your hotel and leveraging OTAs to your maximum benefit, you could boost your inventory and take your income to another level.  

For better handling OTAs inventory and prices, we suggest you add a Channel Manager which will help you to save time, resources and avoid overbookings. 

If you would like to get more info to boost your direct bookings