What is OTA (Online Travel Agency)?
An Online Travel Agency (OTA) is a third-party platform that sells hotel rooms and travel services to consumers, earning a commission on each booking.
Major OTAs include Booking.com, Expedia, Agoda, Hotels.com, and Airbnb. They invest heavily in marketing and search engine visibility, making them a primary discovery channel for travelers. In exchange, they charge hotels a commission on each booking, typically between 15% and 25% of the room rate.
Hotels need a strategy for managing their OTA presence — listing on the right platforms, maintaining rate parity, and investing in direct booking incentives to reduce commission costs over time.
Example
A guest finds your hotel on Booking.com and books a room for $120/night. Booking.com takes a 15% commission ($18), and you receive $102. The same room booked directly through your website would earn you the full $120.
Why OTA (Online Travel Agency) matters
OTAs bring visibility and bookings, but commissions of 15-25% eat into margins. The most profitable hotels use OTAs for discovery while driving repeat guests toward direct booking. Understanding your OTA mix helps you balance reach with profitability.
Related terms
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