An online travel agency, also known as an OTA, is a website or service that connects travelers with various providers of travel-related services and products. These may include hotels, flights, rental cars, vacation packages, cruises and tours. Unlike traditional travel agencies, an OTA typically sells these services directly to consumers.
Many users appreciate the convenience of a single point of contact when booking their travel arrangements. OTAs offer this through dedicated customer support lines or live chat. This helps travelers to feel confident that they’re dealing with a reliable and trustworthy business.
Alternatively, an OTA may combine the flight prices offered by different airlines to create the ideal itinerary for each traveler. This allows them to avoid having to book multiple separate airfares, thereby saving time and money.
For accommodation businesses like hotels, listing on OTAs offers great exposure to a wide audience of potential customers. They can take advantage of user reviews and filters to attract qualified leads and boost their search engine ranking.
The OTA business model usually involves charging a commission fee to the suppliers of the products and services they feature. This fee can be a percentage of the final booking cost or a fixed amount per product sold.
It’s important to consider how an OTA is collecting and remitting tax for each jurisdiction. In Kansas, for example, a marketplace facilitator that collects lodging taxes is responsible for withholding and remitting the tax due on the net rate of the third-party lodging provider. However, this doesn’t apply to hotel and short-term rental marketplaces that pay a wholesale rate for supply and then add their own markup. online travel agency