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Working with OTAs: Pros & Cons, Tips & Tricks

  • Updated

What is an OTA?

 An OTA (Online Travel Agency) is a travel website/platform that specializes in the sale of travel products to consumers.  The OTA has an agency agreement with suppliers (i.e. tour, activity or transportation providers) to resell their products where the OTA takes payment from the consumer and pays net rates to the supplier.

In most cases of OTAs that sell tours and activities, the consumer is issued a voucher which serves as a proof of purchase. 

Pros and Cons of working with OTAs

Advantages

 Disadvantages
  • OTA distribution channels can reach more travelers, including international travelers that would otherwise be too expensive to market to
  • OTAs often provide support in setting up and translating your content & copywriting

  • Performance-based marketing spend: you only pay for bookings you get

  • OTAs take care of payment transactions and their commission includes payment processing / credit card fees and currency exchange if the booking is international

  • Cannot oversell as OTAs tap into the real-time inventory from Zaui 
  • OTA ppc (pay per click) budgets exceed individual companies, taking marketshare that could have been booked direct 
  • Commissions average 20-25% and keep increasing

  • Limited brand exposure. Unless you have a well known brand, OTAs will promote your product, not your brand.

  • Big impact: small changes such as the algorithm for their sort order display can have immediate consequences 

  • Difficult to stay in control without automation (API Connectivity)

 

Tips and Recommendations

  1. Choose the right OTAs for your business - review and research available OTAs at least annually
  2. Know what you are signing up for
  3. Decide how much this business is worth to you in terms of time and effort to set up and business potential
  4. Plan your rates with OTA commissions in mind
  5. Review OTA performance and profitability on an annual basis
  6. Utilise OTAs to reach new audiences
  7. Limit inventory available to OTAs when you can sell direct - such as when customers are already in destination and booking with narrow lead times
  8. Retain customers by offering an incentive to rebook direct and/or share with friends and family
  9. Be prepared to try different things. The market will continue to change!

Zaui connects you to the world's largest online travel marketplaces

For a summary and overview of the key resellers integrated with Zaui go to our List of Integrated Partners (Online Travel Agents).

A full list of partners and integrations, including regional and niche market OTAs can be found in your Zaui system under Settings > Marketplace > Distribution Channels.

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