Online Travel Agencies (OTAs) And Their Business Models

Table of Contents

Airbnb

Booking

Expedia

trivago-business-model — Trivago is a search and discovery travel platform part of Expedia Group. Trivago is widely known as a trusted hotel comparison service. Trivago doesn’t charge based on bookings but rather through a cost-per-click (CPC) model, monetized when a hotel searcher clicks one of its advertiser listings. This referral revenue comprises most of Trivago’s income. Trivago also has another minor revenue stream via subscriptions to its Business Studio, a tool that helps hoteliers track impression and click data associated with their properties.

Google (Google Travel)

Expedia-business-model — Born in 1996 as a travel platform of Microsoft, it would be spun off later on. Expedia became among the largest online travel agencies (OTAs) which comprise a set of brands that go from Hotels.com, Vrbo, Orbits, CheapTickets, ebookers, Travelocity, Trivago, and others. The company follows a multi-brand strategy.

Kayak

OpenTable

Oyo

oyo-business-model — OYO’s business model is a mixture of platform and brand, where the company started primarily as an aggregator of homes across India, and it quickly moved to other verticals, from leisure to co-working and corporate travel. In a sort of octopus business strategy of expansion to cover the whole spectrum of short-term real estate.

Tripadvisor

Trivago

Key highlights of the business models from travel and accommodation platforms:

Airbnb:

Platform business model charging guests a service fee (5% to 15%) and hosts a commission (generally 3%) on reservations.
Competes with other vacation rental platforms like Booking.com, VRBO, and FlipKey, as well as potential competition from Google Travel.

Booking:

Operates under Booking Holdings, controlling six main brands like Booking.com, priceline.com, KAYAK, agoda.com, Rentalcars.com, and OpenTable.
Generates revenues primarily through travel reservations commissions, travel insurance fees, and advertising via KAYAK.

Expedia (including Trivago):

Trivago, part of Expedia Group, is a hotel comparison service monetized through a cost-per-click (CPC) model from advertiser listings.
Expedia also owns other online travel agencies like Hotels.com, Vrbo, Orbits, CheapTickets, Travelocity, among others.

Google (Google Travel):

Originally part of Microsoft and later spun off, Google Travel provides travel-related information and services.
Google Travel’s exact revenue model is not mentioned, but it likely generates income through advertising and possibly affiliate marketing.

Kayak:

Online travel agency and search engine, acquired by Booking Holdings in 2013.
Earns revenue through an advertising model based on cost per click, cost per acquisition, and advertising placements.

OpenTable:

An online restaurant reservation system acquired by Booking Holding in 2014.
Generates income through subscription plans, referral fees, and potentially in-dining revenue.

Oyo:

Utilizes a mixed business model, starting as a home aggregator in India and expanding into other verticals like leisure, co-working, and corporate travel.

TripAdvisor:

Matches travel demand with supply from partners, earning commission on a cost per click (CPC) and cost per thousand impressions (CPM) basis.
Non-hotel revenue includes experiences, restaurants, and rentals.

Trivago:

Part of Expedia Group, Trivago operates as a hotel comparison service, earning revenue through a cost-per-click (CPC) model from advertiser listings and also offers a Business Studio subscription for hoteliers to track data.

OTAs Business Models Recap

OTA	Business Model	Description	Key Features
Expedia	Aggregator Model	Aggregates flights, hotels, car rentals, and vacation packages from various providers. Earns commissions and booking fees.	– Extensive inventory options. – Loyalty program (Expedia Rewards).
Booking.com	Merchant Model	Purchases hotel room inventory at wholesale prices and sells to customers at retail rates. Sets pricing and promotions.	– Large inventory of hotels worldwide. – “Genius” loyalty program for frequent users.
TripAdvisor	Advertising Model	Generates revenue through advertising, sponsored listings, and affiliate marketing on its platform.	– User-generated reviews and ratings. – Offers TripAdvisor Plus subscription.
Kayak	Aggregator Model	Compares prices and availability for flights, hotels, car rentals, and vacation packages from various providers. Earns commissions.	– Focuses on user-friendly comparison tools. – Owned by Booking Holdings.
Hotels.com	Merchant Model	Owned by Expedia Group. Similar to Booking.com, it purchases hotel inventory and sets pricing independently.	– Offers “Hotels.com Rewards” loyalty program. – Extensive hotel options.
Skyscanner	Metasearch Model	Compares prices and availability for flights, hotels, and car rentals across different OTAs and providers. Earns referral fees.	– Provides comprehensive search results. – Owned by Trip.com Group.
Priceline	Merchant Model	Allows users to name their price for hotels and flights. Sells inventory at discounted rates while maintaining anonymity.	– “Name Your Own Price” feature. – Offers Express Deals for discounts.
Orbitz	Aggregator Model	Aggregates flights, hotels, car rentals, and vacation packages. Part of the Expedia Group.	– Focus on vacation package deals. – Orbitz Rewards loyalty program.
Momondo	Affiliate Model	Compares prices for flights, hotels, and car rentals. Earns commissions through affiliate partnerships.	– Simple and user-friendly interface. – Owned by Booking Holdings.
CheapOair	Aggregator Model	Compares prices for flights, hotels, car rentals, and cruises. Earns commissions and booking fees.	– Focus on budget-friendly travel options. – Loyalty program for members.
Agoda	Merchant Model	Part of Booking Holdings. Focuses on Asia-Pacific travel. Purchases hotel inventory and offers it to users at various rates.	– Extensive Asian hotel options. – “Agoda Cash” rewards program.
Travelocity	Aggregator Model	Offers a range of travel services, including flights, hotels, car rentals, and vacation packages. Owned by Expedia Group.	– Promotions and package deals. – Travelocity Rewards program.
Expedia Local Expert	Merchant Model	Provides travelers with activities, tours, and attractions. Offers local experiences to enhance trips.	– Focus on destination experiences. – Booking of tours and activities.
Hopper	Metasearch and Booking Model	Offers flight and hotel price prediction, alerts, and bookings. Earns commissions on bookings.	– “Price Freeze” feature. – Predictive pricing technology.
Opodo	Aggregator Model	Operates across Europe, offering flights, hotels, car rentals, and vacation packages. Owned by eDreams ODIGEO.	– Multilingual platform. – Package deals and discounts.
Hostelworld	Aggregator Model	Specializes in booking hostels and budget accommodations worldwide. Earns commissions on bookings.	– Extensive hostel listings. – User reviews and ratings.
Lastminute.com	Aggregator and Booking Model	Offers last-minute deals on flights, hotels, vacations, and more.	– Focus on spontaneous travel. – Package deals and discounts.
Cleartrip	Aggregator and Booking Model	Serves the Middle East and South Asia. Provides bookings for flights, hotels, activities, and more.	– Mobile app for convenient bookings. – Cleartrip Rewards program.
MakeMyTrip	Aggregator and Booking Model	Focuses on the Indian market. Offers bookings for flights, hotels, buses, trains, and holidays.	– Extensive travel options within India. – Loyalty program for frequent users.
Goibibo	Aggregator and Booking Model	Indian OTA offering flights, hotels, buses, and car rentals. Part of the MakeMyTrip Group.	– Discounts and offers. – “GoCash” rewards program.
Yatra	Aggregator and Booking Model	Provides travel bookings for flights, hotels, holidays, and activities in India.	– Easy booking and cancellation options. – Yatra eCash rewards program.
Ebookers	Aggregator Model	Offers bookings for flights, hotels, car rentals, and vacation packages primarily in Europe. Owned by Expedia Group.	– Focus on European travel options. – “BONUS+” loyalty program.
Travelzoo	Deal Publisher Model	Publishes travel deals and offers to subscribers. Earns revenue through deal sales and advertising.	– Curated travel deals. – Top 20 newsletter.
Vrbo	Vacation Rental Model	Specializes in vacation home rentals. Allows property owners to list their rentals for a fee.	– Wide range of vacation rentals. – Direct communication with property owners.
HomeAway	Vacation Rental Model	Offers vacation rental listings worldwide. Owned by Expedia Group.	– Family-friendly vacation homes. – Secure payment options.
Trivago	Metasearch Model	Compares hotel prices and deals from various OTAs and hotel booking sites. Earns referral fees.	– Focus on hotel comparisons. – User reviews and ratings.
Hotwire	Merchant Model	Offers discounted rates on hotels, car rentals, and flights. Users book without knowing the exact hotel until after booking.	– “Hot Rate” deals. – Last-minute booking options.

Main Business Models for OTAs

OTA Business Model	Description	Key Features	Examples
Aggregator Model	Aggregates and displays information from various providers, allowing users to compare options and book.	– No direct inventory ownership. – Earns commissions or fees from providers for bookings. – Focus on user-friendly platforms for comparison.	Expedia, Kayak, Skyscanner
Merchant Model	OTA purchases inventory (e.g., hotel rooms) at wholesale rates and sells them to customers at retail prices.	– Owns inventory. – Sets pricing and promotions. – Takes on pricing risk.	Booking.com, Hotels.com
Advertising Model	Generates revenue primarily through advertising and partnerships on the OTA’s platform.	– Limited reliance on bookings. – Focus on attracting high traffic. – Display ads, sponsored listings, and affiliate marketing.	TripAdvisor, Trivago
Subscription Model	Offers premium subscription services to users, providing benefits like exclusive deals and discounts.	– Steady subscription income. – Enhanced user experience for subscribers. – Potential for upselling premium features.	TripIt, Hopper Plus
Metasearch Model	Aggregates and compares prices and availability across various OTAs and providers.	– No direct booking capability. – Focus on referral traffic to other OTAs. – Monetizes through referral fees.	Google Flights, Skyscanner, Trivago
Affiliate Model	Promotes third-party travel services and earns commissions on referrals or sales generated through the OTA’s platform.	– No direct inventory or booking services. – Relies on affiliate partnerships. – Earns commissions for driving traffic and sales.	Momondo, Cheapflights