Online travel agencies (OTAs) have been both coveted and criticized since they rose to prominence in the early 2000s. Representing 13% of global travels gross booking and growing at 12% annually, OTAs play a pivotal and expanding role in the travel landscape. However, in a climate where suppliers are pushing their direct distribution, OTAs can be seen just another intermediary in the value chain. This view overlooks the value of OTAs, which goes beyond assisting with the sale of excess inventory during soft demand. OTAs offer suppliers unprecedented reach around the globe and a valuable marketing tool. As a result many hotel suppliers have built a symbiotic relationship with OTAs, benefiting from their influence while managing their own distribution as well.
OTAs More Than a Distribution Channel
For hotels, OTAs are more than a distribution channel. They have marketing influence similar to search engines and metasearch sites, and they can engage customers globally through all the stages of the travel experience – with whatever devices their customers choose to use. OTAs have extended their influence through mobile (multi-device) usage and metasearch, and the influence will continue to escalate.
In 2013, U.S. OTAs spent nearly $700 million on advertising, and that figure is expected to jump 8% over the next two years of the amount, nearly eight in 10 dollars was spent online, mostly on search, metasearch and display.