An OTA (Online Travel Agency) is a website or app where travelers compare and book hotels, such as Booking.com or Expedia. OTAs bring visibility and demand in exchange for a commission on each booking.
OTAs invest heavily in advertising, loyalty programs and user experience, which gives hotels reach they could never buy alone. Commissions typically sit in the mid teens to mid twenties as a percentage of the booking value, varying by market and contract.
The healthy posture is using OTAs as a marketing channel while converting repeat guests to direct bookings. Problems start when a hotel becomes dependent on one OTA for most of its demand, losing pricing power and guest relationships at the same time.
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