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What Is an OTA (Online Travel Agency)?

February 03, 2023
By Andrew Sheivachman
Categories Travel 101

Online travel agencies (OTAs) are a popular way for business and leisure travelers to book flights, hotels, and rental cars.

While OTAs offer convenience, they lack the comprehensive features that make it easy for businesses to manage their travel budgets and provide service to business travelers.

That’s why many companies turn to dedicated corporate travel management companies (TMCs) and online booking tools (OBTs) instead of using an OTA for business travel.

For travel managers, it’s important to be aware of and understand the benefits and shortcomings of using an OTA for business travel. Here’s everything you need to know about OTAs and why your business travel program will benefit from a dedicated corporate travel platform.

What is an OTA?

An online travel agency is a website where travelers  can book flights, hotels, rental cars, cruises, tours, vacation packages, short term rentals, and more.

The first OTAs launched in 1996: Travelocity, which stemmed from a partnership between American Airlines and Sabre, and Expedia, which was created from a partnership between Microsoft and Boston Consulting Group. 

These companies brought self-service travel booking to the Web for the first time at scale. Before then  travel had to be booked through brick-and-mortar travel agents or directly with suppliers. There were outliers, like the eAAsySabre tool in the late 1980s and the web-based Hotel Reservations Network in 1995, but OTAs were the first to bring together multiple types of travel products in one full-service shopping environment.

These early OTAs were primarily focused on providing a simple and convenient way for consumers to book flights and hotels. However, their offerings were limited compared to what is available today. Popular sites like Priceline, Agoda, and Trip.com followed afterwards.

OTAs generally have two main business models: the merchant model, where a site acts as the merchant of record and sends payment to a supplier after a trip minus its commission, and the agency model, where suppliers are paid directly and send a commission back to the OTA for bookings.

In the late 1990s and early 2000s, the popularity of OTAs began to grow rapidly as more and more consumers began to embrace the internet as a way to book travel. This growth was driven by several factors, including the increasing availability of high-speed internet, the growing number of travel options available online, and the increasing number of consumers who were comfortable making online purchases.

As OTAs grew more popular, these companies began to expand their offerings to include a wider range of travel products and services. Rental cars, vacation packages, and travel insurance were added. Many OTAs also began to invest heavily in their websites and mobile apps, making it even easier for consumers to book travel from anywhere, at any time.

Today, OTAs are an integral part of the travel industry and are responsible for a significant portion of all travel bookings made online.

What are OTA’s best features? 

OTA shopping experience

Online travel agencies provide a good shopping experience to leisure travelers by offering a wide range of travel options in one place. This allows them to quickly compare prices, read reviews, and view photos of different hotels, flights, and rental cars, making it easy to find the best option for their needs. 

Additionally, many OTAs offer recommendations, which can help travelers discover new and exciting destinations, activities, and accommodations they may not have considered before.

The process is secure and fast, giving travelers the peace of mind that their booking is confirmed, and providing them with all the necessary information to begin their trip.

Choice of travel options

Online travel agencies offer leisure travelers a wide range of options when considering a vacation. 

Many online booking tools provide discounts on packages and bundles as well as reviews from other travelers so that people can make an informed decision about their trip. 

OTA travel inspiration

Travelers often find inspiration when researching travel using an online travel agency by browsing through a wide range of options, including destinations, accommodations, and activities. They can read reviews from other travelers, view photos, and compare prices to help them make an informed decision. 

Traveler Reviews

It’s rare for travelers to book a trip without reading reviews. Travelers can turn to online travel agencies for verified reviews of hotels, vacations, and other types of travel experiences. 

Reading reviews on OTA websites helps travelers feel reassured that they’re making a good choice about the quality of accommodations and services offered at each destination.

Areas where business travel platforms are better than OTAs

Cost savings

A benefit of using a corporate booking tool instead of an online travel agency is cost savings. 

Corporate booking tools can save businesses significant amounts of money by providing access to corporate rates, negotiating discounts from suppliers, and managing group bookings. 

Additionally, many corporate booking tools provide customers with tailored reporting so that businesses can easily track expenses and ensure they are getting the best deal for their travel needs.

Policies and travel inventory

Modern corporate travel platforms like Spotnana provide access to travel options from OTAs like Expedia and Booking.com in addition to a wide array of global content. This means that employees can still access the same deals and offers that they would find on an OTA, but they can do so within the context of the organization’s travel policy. This can help to ensure that all travel is compliant with company guidelines and can help to control costs by presenting preferred and negotiated rates. 

At the same time, having comprehensive travel inventory options in one place makes it easier for employees to find and book the right travel arrangements for their needs.

Using a modern corporate travel platform like Spotnana helps  streamline the travel booking process. This is particularly beneficial for organizations with many travelers. This can save time and resources, and can help to ensure that all travel is booked in a timely and efficient manner.

Service

When businesses choose to use a corporate booking tool instead of an online travel agency, they benefit from the added level of service that comes along with it. 

Corporate online booking tools and travel management companies provide comprehensive support to travelers and businesses with complex itineraries and needs, such as managing large groups or negotiating corporate rates. They also offer timely support from experienced travel agents with shorter wait times and personalized service across the phone, email, and chat.

Using a corporate travel platform instead of an OTA  can save businesses significant amounts of time and effort. 

Reporting and analytics

If business travelers book across a variety of consumer sites, it’s impossible for travel managers and finance professionals to have a full understanding of travel spending and traveler behavior in real time.

Business travel platforms like Spotnana offer real-time reporting features, allowing organizations to easily track and analyze all aspects of their corporate travel program. This includes everything from flight and hotel bookings, expenses, and employee behavior, to travel policies and more. This level of detail and customization makes it easier to identify areas for cost savings and to optimize the travel program for maximum efficiency and savings.

Business travel platforms also integrate with other systems used by the organization, such as expense management and accounting systems. This integration eliminates manual data entry, reducing the risk of errors and ensuring that all data is up-to-date and accurate. A modern business travel platform provides a single source of truth for all travel data, making it easier to analyze and make informed decisions.

Security and duty of care

Businesses also benefit from added security when using a corporate booking tool instead of an online travel agency. Corporate booking tools provide businesses with additional layers of security by verifying the identity of travelers, ensuring that they remain compliant with company policies, and providing access to real-time updates on flight statuses and other important travel information. 

Spotnana offers safety tools including a Live Map that shows the location and status of every traveler in your program.

What is an OTA versus an OBT?

Businesses that choose to use a corporate booking tool instead of an online travel agency can benefit from cost savings, better service, and a streamlined booking processes. 

Additionally, modern corporate travel platforms include inventory provided by online travel agencies, making it easy to get a wide variety of travel options with better visibility and control over travel spend. Corporate online booking tools can help ensure that all travel is compliant with company policies and within budget, making it a valuable asset for any organization looking to maximize the efficiency and efficacy of their travel program.

Want to learn more about how you can transform your travel program? Get a demo of Spotnana today.