Merchant and agency are the two main OTA business models. In the merchant model the OTA collects the guest's payment and pays the hotel later. In the agency model the guest pays the hotel directly and the OTA invoices its commission.
Expedia historically leaned merchant, holding the money and often paying hotels through virtual cards. Booking.com historically leaned agency, with the hotel charging the guest and paying commission afterward. Both companies now offer variants of each model.
The choice affects cash flow, payment risk and operational workload. Merchant bookings shift fraud and payment handling to the OTA but delay hotel cash and involve VCC processing. Agency bookings give the hotel immediate control but also the chargeback and no-show collection burden.
← sesion.org · All categories · Advisors · Blog · Glossary