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Online travel agency (OTA): a complete guide for tour operators

An overview of OTA benefits and how that can impact your business.

Online travel agencies (OTAs) have completely flipped the tourism industry upside down the past couple of decades and are expected to continue to grow in popularity. By centralizing all available tour options, and making it simple to browse, compare, and book, these platforms have given tourists what they value most: convenience. 

From the bookers point of view, why would you spend a ton of time going back and forth between multiple websites when you could do it all in a single place? Tag along as we break down how OTAs have helped shape the modern tourism landscape.

What are Online Travel Agencies?

OTAs are websites that sell travel offerings, from tours and activities, to car rentals and accommodations, there are OTAs for every part of travel. There are large OTAs (read: Viator) and niche OTAs focused around certain locations and experiences. These websites and apps are the ultimate travel planners, giving travelers access to hundreds of options all with a few clicks. 

Definition and Role of OTAs

OTAs are like digital travel buddies, making it super easy for your customers to plan their next adventure without breaking a sweat. 

Think of platforms like Expedia, Booking.com, or Kayak — they bring together all the travel options in one place. OTAs act as the middleman between customers and the travel suppliers, like airlines, hotels, or tour operators. 

They do the heavy lifting by showing people countless options, so they can compare prices and lock in the best deals.

OTA Functions and Services

So what makes OTAs so effective? Well, they’re essentially the Swiss Army knives of travel planning — they’ve got a tool for everything!

First and foremost, they’re a one-stop shop for travel bookings, covering flights, hotels, tours, and even vacation packages. But they don’t stop there. They also feature customer reviews to showcase what real people think about an offering before commiting. Plus, they sprinkle in handy extras like travel tips, packing guides, and even destination overviews to help customers plan their perfect trip. It’s like having a travel agent, guidebook, and review site all rolled into one convenient platform.

Key Financial Metrics in OTA Travel

At the heart of every successful OTA relationship is a solid financial game plan. No matter if it’s analyzing profit and loss statements, keeping tabs on cash flow, or strategizing for long-term growth, understanding the financial aspects of your business is what keeps the lights on — and the bookings rolling in.

Revenue Reporting and Analysis

With OTAs, tracking revenue within accounting periods isn’t just important, it’s essential for keeping your business on the right track. 

Knowing exactly how much you’re earning (and when) gives you a real-time view of your financial health. For instance, keeping tabs on metrics like sales, profit, and cash flow during specific periods helps you understand trends, like when people are booking the most or which services are raking in the cash. 

It’s the kind of insight that lets you make smarter moves — such as, ramping up promotions during peak seasons or cutting back when things are slow.

Challenges and Opportunities in OTA Travel

The OTA world isn’t all sunshine and smooth sailing—there are plenty of challenges along the way. When selling on OTAs there are issues of fierce competition and market saturation to trust issues and shifting customer expectations, But the good news? There are still plenty of opportunities for growth and innovation as well.

Let’s dive further into both.

Common Challenges for selling on OTAs

With so many operators and travel companies selling on OTAs, there are some pretty big challenges in today’s crowded market. With so many options available, it can be tough to stand out from the pack. 

Market saturation means travelers have endless choices, and it’s not always easy to convince them that your tour is the best option. This means that businesses need to get creative, no matter if it’s through unique offerings, personalized experiences, or aggressive marketing, to capture attention and stay top of mind for travelers.

Growth Opportunities

On the other hand, emerging markets can be a goldmine of growth potential on OTAs. 

As travel demand skyrockets in places like Asia, Africa, and Latin America, online travel agencies allow you to tap into new customer bases that are just getting into the travel game. 

These regions are seeing rising middle-class populations and more people eager to book travel online. Here, your listings on OTAs can focus on localized offerings, language preferences, and culturally tailored services to make a big impact in these up-and-coming markets.

 

While working with OTAs in this increasingly crowded market requires some serious organization and extra effort. But with a well-rounded online booking platform like FareHarbor, it doesn’t have to be difficult.

With FareHarbor’s dedicated distribution network, it’s easy to stay on top of your bookings made through OTAs, with one Dashboard and automatic updates to pricing and availability. Even more, you can easily understand total sales, revenue, payouts, and refunds at a glance with our advanced analytics tools. Why work harder when you could work smarter?

Ready to see what FareHarbor can do for you? Sign up for your free demo today!

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