The Total Guide to Online Travel Agencies (OTAs) thumbnail picture
  26 Nov 2020

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The Total Guide to Online Travel Agencies (OTAs)

Travel agencies have been around for quite some time; brick and mortar travel agencies were highly utilized until the advent of online travel agencies in the 1980s. Helpful to the hospitality and tourism industry, OTAs connect guests to real-time booking engines and expedite the process. 

Hotels can use OTAs as another channel to reach more potential customers, and travelers can use OTAs to easily compare prices, book rooms, and let a third-party business handle the rest of the details. But what does an OTA look like and how does it work? Is it worth the possible savings? 

Evolution of OTAs

As mentioned before, since the advent and development of the internet, OTAs have become more and more prevalent. Travel agencies’, in general, most basic function is to perform a certain level of planning for a customer’s trip. For example, a guest can simply ask a travel agent to put together a potential itinerary for a vacation, along with suggestions on where to stay and how to travel around (i.e. bus, rental car, train). A travel agent can also entirely plan and reserve the whole vacation, to every minute detail–especially if that is what the customer wants. 

Naturally, before the internet, travel agencies were located in actual offices around the globe and had their own connections to hotels, rental companies, and airlines that they used in order to plan out trips for their customers. They also most likely had access to the GDS, the global distribution system, which connected them to airlines and accommodation services in the early development and use of the internet. OTAs still use this access to the GDS, as it still gives them that immediate information that they can use to help customers book reservations.

Now, since customers and guests have the ability to book their own flights and rooms on the internet, travel agencies have adapted by upgrading to online booking systems. There are still brick and mortar travel agencies around the world, but most agencies have made the move to be completely on the internet. 

How OTAs Work

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OTAs utilize whatever access options they have to airlines, hotels, and other travel industry businesses. GDS is a tried and true conduit for OTAs, and they regularly access this mainframe of information since airlines still primarily use this resource. Businesses in hospitality can also seek out OTAs to have their booking engine connected, ensuring that their rooms and prices are readily available to an ever wider audience. In other words, OTAs collect all of the information related to what their customer wants; for example, if they are wanting to travel to Ontario, Canada, the OTA uses their online connections and resources to pull together a list of real-time booking options for their customer to peruse. If a customer decides to go with a booking through an OTA, it should automatically update on the hotel’s own website and booking system. 

When you reserve a flight off of an airline’s website, you are not utilizing any third-party options or OTAs. There is little to no pause or delay when you book directly on a company’s website, as you are dealing directly with them. When you use an OTA to do this, there will be a little bit of a lag, simply because they are not the main party in the process. Instead, they are a medium through which you can book or reserve things.

Benefits and Drawbacks

On the consumer side, it is possible that you can book a trip spending less money than you would making reservations directly with hotels or airlines. This is a clear benefit to using OTAs, since airlines offer a special discount only through a third-party vendor at certain times. However, be sure to check as to why a flight or booking is cheaper; sometimes, an OTA has a higher cancellation or change fee that is not initially included (or obvious) in the business transaction.

While hotels or airlines will only allow you to make multiple bookings through their company, OTAs allow you to view and book varying businesses, depending on what works best for you. For instance, it may be less expensive for you to book a flight through American Airlines going to a destination and then Southwest Airlines coming back. Although you can book directly with these airlines, an OTA is sort of a one-stop-shop that lets you book all in one place, regardless of whether you ultimately end up using one airline or many different ones.

As a consumer, if you feel as though you want to know all of the details and rates available for a vacation, then consider OTAs, but you may end up wanting to contact and book with each business directly. If you are okay with having someone else handle the minute transactions and connections, then feel free to hand some of your worries over to an OTA. 

As a business, OTAs can greatly increase consumers’ awareness of your bookings and reservations available. Keep in mind that you will most likely have to give these OTAs a part of the commission, but if you ultimately want more people to have access to your business, then consider connecting with some OTAs.

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