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Analysis of Major Online Travel Agencies – OTAs

By Cloudbeds, September 18, 2020

With so many online travel agencies (OTAs) to choose from, each with its own commission costs, target markets, and user experience, managing your property’s distribution can be a complicated endeavor. Within a constantly shifting distribution environment, it can be difficult to zero in on the optimal channel mix. 

A major aspect of effective channel management and a smart revenue strategy is to distribute your property’s inventory in a manner that helps you achieve your goals. Whether that’s filling rooms in a period of low demand, increasing market share from a particular group or region, or increasing visibility with a target demographic, you need to get your rooms in front of your ideal guests. 

That’s where online travel agencies shine. When managed correctly, these third-party distribution channels give you the flexibility and control to maximize bookings and meet your revenue goals. 

But which online travel agencies are right for your property? 

This guide will help you answer that question by giving you a comprehensive overview of the world’s top OTAs. Before we dive into the hotelier’s guide to online travel agencies, we’ll explore the benefits of these partners and recommendations for using them wisely. 

Here’s a list of the global online travel agencies we’ll cover: 

  1. Agoda
  2. Airbnb
  3. Booking.com
  4. Expedia
  5. Google Hotel Ads
  6. Hostelworld
  7. Hotelbeds
  8. Tripadvisor

We’ve also included a list of major localized OTAs that are prominent in specific regions:

  1. Ctrip
  2. Ingoibibo/Goibibo
  3. Traveloka
  4. eDreams/ ODIGEO
  5. HRS
  6. Despegar/Decolar
  7. Ostrovok

 

How Online Travel Agencies Work: The Benefits of OTAs

Online travel agencies emerged in the 1990s, using the internet’s extensive reach to aggregate global travel supply into a single place so consumers could book their own travel online. These self-service tools reshaped the way travel was researched and booked, as the general public could now easily plan their trips and reserve their airfare, accommodations, and tours on their own rather than rely on a physical travel agent. 

Sites such as Expedia, Booking.com, Airbnb, and TripAdvisor are often consumers’ first stop when researching travel plans. These sites offer value to consumers at all stages of the buying process: problem/need recognition, information search, evaluation of alternatives, purchase decision, and post-purchase behavior. 

For consumers, there were additional benefits beyond the convenience of self-service. These include:

    • Global access. Travelers could now view and book inventory from anywhere in one place without having to ask for help or do extensive research. This led to the discovery of new destinations and contributed to a dramatic expansion of tourism worldwide.
    • Price transparency. With travel agents working as the intermediary to book trips, it wasn’t always easy to do direct price comparisons. For the first time, travelers could see prices in one place and make decisions accordingly.
    • Competitiveness. Hotels could also see the prices of competitors much more easily than they could before, which led to an increase in competitive pricing that benefited the consumer.
    • Trust and versatility. OTAs have created their own brands that consumers trust and recognize as thought-leaders. They also offer consumers a versatile experience, with a multitude of travel options, trusted reviews, and accurate local information.

For hoteliers, OTAs have evolved into sophisticated marketing channels for properties of all sizes. Never before have consumers been able to easily compare different travel options side-by-side in terms of price, dates, and location. 

Simply being present on these channels can have a dramatic influence on a property’s visibility. For example, many hotels benefit from the “billboard effect which happens when potential guests discover a hotel on an online travel agency and do further research about the property, thus increasing traffic to the hotel’s website and leading to more direct bookings.

Additional benefits include:

    • Access to new markets. These platforms offer access to travel markets once unattainable by smaller, independent property owners. Hoteliers of all sizes rely on OTAs to access new regions, guest segments, and customer demographics.
    • Micro-targeting. OTAs channels, especially niche OTAs that cater to a specific type of property or traveler, allows hotels to dive deeper into segmentation and target certain markets with specific offers. OTAs benefited from new ways to target travelers and market their properties.
    • Variable demand. Rather than having to rely solely on their own marketing efforts, hotels turn to OTAs for variable demand. Hotels can control how much inventory to make available on each channel and take a more nuanced approach to distribution.
    • Known and trusted brands. OTAs provide a reputable brand that travelers trust,  which makes them much more likely to book. Being seen on an OTA platform especially benefits independent properties that lack global brand recognition.

 

How Online Travel Agencies Make Money

Hotels basically outsource marketing to OTAs, who then make money in two ways: the merchant model (guest pays in advance) and the commission model (guest pays at check out). Most OTAs offer a blended model so that hotels can allow guests to decide which one they’d prefer.   

  • The merchant model. In this model, the online travel agency acts as the merchant of record and collects payments from guests at the time of booking. Once the guest has checked out, the OTA pays the hotel. Contracts exist between hotels and OTAs to provide a set number of rooms to the OTA at a favorable rate. The OTA then makes a profit off each room sold but must meet its contractual thresholds. 
  • The agency (commission) model. In this model, the consumer books via the OTA but pays the hotel directly at time of checkout. The hotel then pays the OTA a commission on the total value of the booking after checkout. There are no contracts and rates are set by hotels.

Over the years, as hoteliers began to rely on online travel agencies for more of their bookings, OTAs leveraged their dominance to shift to the commission model and gradually increase commissions. Part of this increase reflected the growing cost of advertising online but these are also public companies under pressure to meet margins. Independent hotels also suffer from higher commissions (as high as 30%), compared to the 10-15% paid by larger brands, who have greater leverage to negotiate lower commissions

For hotels,  it can be frustrating to watch distribution costs rise without getting more in return, but there are costs associated with direct bookings too. Demand doesn’t appear without at least some sort of distribution or marketing strategy in place, and those marketing campaigns, loyalty offers, special deals, and direct booking tools have a cost to the hotel. That’s why it’s important to use OTAs wisely, which we’ll cover next. 

 

How to Use OTAs Wisely

While third-party channels are often criticized for rising commission costs and lacking collaborative relationships with hoteliers, OTAs most definitely have a place in a profitable hotel distribution strategy. Strategic distribution via OTAs not only provides access to specific customer segments and geographies but can also help your property achieve greater return on marketing investment. 

OTAs also offer more than extended reach. They serve culturally-relevant user experiences that attract travelers from all over the world. This includes currency conversions, language support, and tailored experiences based on purchasing habits. OTAs offer hoteliers access to non-brand-loyal travelers, active travelers, and the packaged traveler. 

Either way, hotels, in general, cannot compete with the marketing budget that OTAs have available. So even though hotels have to pay OTAs a commission, these bookings may actually be more profitable than those secured through direct marketing. It all hinges on how well your property manages its customer acquisition costs.

Here are a few recommendations on how to get the most out of your OTA partners:

  1. Optimize your profile on each channel. Pay close attention to how your profile looks to potential guests. Each channel is different, so make sure to complete every field, upload high-resolution images, and keep your information current. Having a quality profile on each channel will optimize your property’s OTA ranking and make it more competitive in search results.
  2. Manage your reputation carefully. Most OTAs use guest reviews as a key factor in determining a property’s reputation and use the review score as a determining factor in search ranking. Carefully manage your hotel’s reputation by asking guests for reviews, monitoring those reviews, and responding consistently. 
  3. Use a channel manager. Effective hotel channel management means that your room availability is optimally distributed across all of your chosen channels. It helps you put the right room in front of the right customer at the right time, and will update your availability across all your distribution channels, your PMS, and your website’s booking engine

Now that we’ve set the context around how to leverage your OTA partners, let’s look at the best OTAs for your property. 

 

What Is the Best Online Travel Agency for Your Property?

Not every online travel agency is right for every property. By analyzing each OTA and identifying what works best for your property, you can leverage OTAs to their full advantage within a diversified channel management strategy.

Check out our analysis of the most popular OTAs in the world, below. Cloudbeds integrates with each of these channels and hundreds more

 

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Global  OTAs 

 

Agoda

Agoda was founded in 1998 and later acquired by the Priceline Group (now called Booking Holdings) in 2007. Agoda’s website is available in 38 languages and focuses on listing all types of properties. It’s currently one of the leading online travel booking sites for the Asian market but is pushing into the US, India, and European markets. [How to connect Agoda]
Best for: All accommodation types
Listings: Over 2 million
Total audience: 2.3 million travelers from 65 countries
Commission: Average of 16%; varies by market and property type/size/brand

Airbnb

Airbnb is known for providing access to unique accommodations around the world, with the vast majority of properties located outside of main hotel districts. While the company continues to expand into hotels following its acquisition of HotelTonight, it’s community expects a certain type of experience. Namely, something that is less cookie-cutter and more oriented to the local vibe. [How to connect Airbnb]
Best for: Vacation rentals, bed and breakfasts, shared accommodations, boutique hotels, hostels, and other independents
Listings: Over 7 million across 100k+ cities in 220+ countries
Total guests/active users: Over 750 million guest arrivals all-time and 150 million users
Commission: For hotels, the “host-only fee” ranges from 14% to 20%, plus 2% for listings with the super strict cancellation policy. For others, including vacation rentals and shared spaces, there is an option to split fees between host and guest: The host pays 3% of the subtotal, while the guest pays 14.2% of the booking subtotal. The host fee in Mainland China is a flat 10%, with no guest fee.

Booking.com

Booking.com is one of the largest and most popular travel websites in the world, with over 1.5 million nights booked every day. Its website and mobile apps are accessible in 43 languages and feature over 50 million verified guest reviews of properties in 200+ countries. Its parent company, Booking Holdings, includes brands Priceline.com, Kayak, Agoda, Rentalcars.com, and OpenTable. [How to connect Booking.com]
Best for: All accommodation types, including resorts, villas, cabins, hotels, apartments, hostels, vacation rentals B&Bs, and more
Listings: Over 28 million listings in 200+ countries with over 50 million verified guest reviews
Total audience: Over 50 million
Commission: Average of 15%; varies by market and property type/size, from 5% to 30%, and determined during the contracting process. (More info, including a commission calculator)

Expedia

Expedia is the flagship brand of Expedia Group, which includes 200 travel booking websites serving 75 countries in 35 languages with over 600 million monthly visits. The website includes searches for all types of accommodations, as well as flights, car rentals, cruises, and vacation packages. By activating the Expedia connection, properties will broadcast their inventory on Hotels.com, Wotif, and many other channels. [How to connect Expedia]
Best for: All accommodation types and sizes worldwide
Listings: Over 590k properties and 1.8 million bookable vacation rentals in 70+ countries with 40 million post-stay reviews
Total audience: Over 50 million
Commission: Average 16.5%; varies by market and property type/size, from 5% to 30%, and determined during the contracting process. (More info)

Google Hotel Ads

Google Hotel Ads is a full-featured accommodations search product that acts as a companion to Google Flights. It operates on a metasearch model, meaning that hotels pay for performance on a cost-per-click or cost-per-acquisition basis. The channel is especially useful for independent properties because they can more easily compete against bigger players within the metasearch format. Google first launched Hotel Finder in 2011 as a basic tool that allowed users to search for hotels in the US. Today, it has fully incorporated hotel search into its popular Google Maps platform. [How to connect Google Hotel Ads]
Best for: Properties of all sizes, especially independents looking to capture more direct bookings and compete more effectively with bigger players
Listings: N/A (more info)
Total audience: Depends on search volume; over 50 million
Commission: Varies depending on the campaign and performance structure (cost-per-click or cost-per-acquisition)

HostelWorld

HostelWorld is a leading OTA for hostel-focused accommodations worldwide with 12+ million guest reviews. Their inventory also includes hotels, B&Bs, and other budget accommodation types. Hostelworld aims to be a leader in social travel via their booking options and mobile app, addressing the needs of guests who want to make connections with others as they experience the world around them. Their app and website operate in 20 different languages. [How to connect HostelWorld]
Best for: Hostels, Hotels, Bed and Breakfast, Guesthouses, Apartments and Campsites
Listings: 36,000 properties, 178 countries
Total audience: Over 13 million verified guests
Commission: Starting at 12%, average 15%

Hotelbeds

Hotelbeds By connecting to Hotelbeds, your property will gain unrivaled exposure to the world’s travel trade including more than 3,500 Tour Operators, over 65,000 Travel Agents, 40+ Airlines, Loyalty/Employee Points Plans and OTA’s. [How to connect Hotelbeds]
Best for: All accommodation types
Listings: 180,000 properties covering 185 countries across all continents
Total audience/active users: 60k Travel Distributors,140 Source markets
Commission: 23% average

TripAdvisor

TripAdvisor is widely known for its massive trove of guest reviews for hotels worldwide – over 465 million reviews and counting. The company also offers Instant Booking so that users can book hotels directly without having to leave the site. [How to connect to Tripadvisor Instant Booking]
Best for: All accommodation types
Listings: 7.3 million accommodations, airlines, attractions, and restaurants
Total audience: 490 million active users per month
Commission: 15% average

 

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Regional OTAs

 

ASIA 

Ctrip / Trip.com

Ctrip is China’s leading provider of travel services including reservations for accommodation, transportation, tours, and corporate travel. Founded in 1999, the company owns and operates several other OTAs, including Trip.com, Skyscanner, Qunar, and Ctrip. [How to connect to Ctrip]
Best for: Hotels and motels
Listings: Over 600,000
Total audience: Between 5 and 50 million
Commission: Average of 19%; varies by market and property type/size/brand

Ingoibibo/Goibibo

Ingoibibo/Goibibo, founded in 2009, Goibibo has become one of India’s largest online travel companies and owns popular sites makemytrip.com, as well as redBus.in, a popular bus ticketing platform, and PayU India, a leading payment platform. Goibibo’s integrated focus on hotels, transportation, payments, and mobile have made it one of the leading providers for Indian travelers. Goibibo and makemytrip have emerged as flagship brands with wide recognition making it a must-have channel for properties in India. [How to connect Ingoibibo/Goibibo]
Best for: All accommodation types, from hotels to hostels to campgrounds and others with extensive coverage within India and Asia
Listings: Over 60,000
Total audience: Over 50 million
Commission: Average of 15.5%; varies by market and property type/size/brand.

Traveloka

Based in Indonesia, Traveloka is one of Asia’s largest online travel agents. Traveloka lists hundreds of thousands of properties across Southeast Asia, Australia, and around the globe. The company also provides lifestyle products and services, such as tickets to attractions, activities, car rental, and restaurant vouchers. [How to connect Traveloka]
Best for: All accommodation types, hotels, resorts, guest houses, villas, or apartments
Listings: More than 100,000+ hotels worldwide
Total audience: 2,000,000+ verified reviews
Commission: 15% average

 

EUROPE 

eDreams ODIGEO

eDreams ODIGEO is one of the world’s leading online travel agencies and Europe’s largest flight retailer, with a presence in 33 markets. In 2017, they acquired BudgetPlaces to break into accommodation rentals and start selling travel packages. The company claims that over 50,000 people book with them every day, with more than 10.7 million bookings each year across its five brands: eDreams (global), GoVoyages (France), Opodo (Europe), Travellink (Nordics), Liligo (travel search), and BudgetPlaces (Europe). [How to connect eDreams ODIGEO]
Best for: All accommodation types
Listings: Over 1.1 million
Total audience: 18 million in 46 countries
Commission: Average of 20%; varies by market and property type/size/brand (more info)

HRS Group

HRS Group is one of the largest OTAs and offers both travelers and businesses the opportunity to distribute their inventory to a global market. More than 40,000 businesses use HRS to book company and corporate travel. HRS is most prominent in Europe but displays inventory from around the world.
Best for: Hotels
Listings: 300,000
Total audience: Under 1 million
Commission: Average of 16%; varies by market and property type/size/brand

 

LATAM 

Despegar/Decolar

Despegar/Decolar is a leading online travel company in Latin America, with Despegar functioning as the global brand and Decolar representing the brand in the Brazilan market. Their marketplace operates across 20 markets and offers a broad suite of travel products in the region, including airfare, hotel bookings, travel packages, and other travel products to a large customer base. [How to connect Despegar/Decolar]
Best for: Hotels
Listings: More than 520,000 accommodation options, operating across 20 countries
Total audience: Over 18 million customers
Commission: 19% average

Russia

Ostrovok

Ostrovok offers a wide selection of over 900,00 properties worldwide. They run the largest hotel supply team in Russia and have over 5 million website visitors per month. Ostrovok also has a customer loyalty program called Bank of Dreams. [How to connect Ostrovok]
Best for: Hotels, hostels, apartments
Listings: 900,000 in 220 countries and territories
Total audience: Over 5 million monthly users
Commission: 15% average

Conclusion

Online travel agencies offer hoteliers and hosts of all property types a valuable opportunity for reaching travelers worldwide and turning them into guests. Not every OTA is right for every property. By analyzing each OTA and identifying what works best for your property and you can leverage OTAs to their full advantage.

Check out Cloudbeds’ Big Book of OTAs for a more in-depth look into building a smart distribution strategy and additional niche and regional online travel agencies you can benefit from today.  

 

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About Cloudbeds

Cloudbeds is the fastest growing hospitality management software suite in the world, providing tools to manage properties of all types and sizes – building revenue, driving bookings and increasing operational efficiency. Trusted by more than 20,000 hotels, hostels, inns, and alternative accommodations in more than 155 countries, the Cloudbeds suite includes a powerful PMS, a leading Channel Manager, and a conversion-driven Booking Engine. Through access to 300+ integrations available via the marketplace, Cloudbeds helps properties unify their management, reservations and booking systems, grow revenue and automate workflows with confidence and ease. Founded in 2012, Cloudbeds has expanded to more than 400 people with local teams in 40 countries. 

 

 

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