Focus: The Business of Online Travel Agency (OTA)
Online travel agencies (OTAs) are digital companies that enable travelers and customers to buy various travel-related services such as hotels, air tickets, tour packages, visa processing, etc digitally. In many ways, OTAs are the digital version of physical travel agents, simply with more benefits and ease for travelers.
OTAs, to some extent, are aggregators who aggregate demands aka travelers who come to the OTAs for travel-related services. OTAs, on the other hand, make money in the form of commissions from hotels and airlines. Traditionally, hotels offer better commission rates than airlines. However, earning a commission does not come easy. It takes years of relationship building and ensuring a certain volume to claim a sizable commission from the suppliers.
Over the past years, OTAs have seen excellent growth globally. OTAs account for almost a third of the $8.3trn global travel industry and the share is growing quickly.