Online Travel Agencies (OTAs)

Online Travel Agencies Need To Reinvent Themselves To Fend Off Rising Costs And Google - Forbes

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Online Travel Agencies Need To Reinvent Themselves To Fend Off Rising Costs And Google

Excerpt from Forbes

Online travel agencies (OTAs) are the original digital disruptors - first-generation internet businesses that identified an unmet customer need and created digital destinations that became the first stop for prospective travelers. Yet the very thing that gave rise to OTAs - the ability to aggregate digitized data to create economical, do-it-yourself travel planning - now threatens to be their undoing. As with most erstwhile digital upstarts and once-transformative business models, OTAs must disrupt again or risk being disrupted.

Where 20 years ago planning travel was a complicated, anxiety-fraught exercise, travelers today feel more in control, thanks in large part to OTAs. The digitalized travel model brought comparison shopping and price transparency to desktops and mobile devices, and travelers embraced this self-sufficient approach to planning business and pleasure trips because of its enhanced flexibility and customization.

That awakening helped produce explosive growth for both travel and OTAs but spawned myriad challengers competing for the same customer. Eventually, the explosion of rivals led to bigger and savvier OTAs as small ones were gobbled up.

The consolidation created heavyweights in the travel value chain. Booking Holdings and Expedia, the two biggest OTAs, boast a combined market cap of more than $100 billion, comparable to the four largest US airlines combined.

But competition doesn’t end there. The biggest threat in travel planning could eventually come from the tech powerhouse that helped OTAs become successful in the first place. After years of quietly building a brand in travel, Google today has become a leading option for travel search, second only to Expedia.

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