Restaurants, hotels and travel
Online travel agency (OTA)
A website or app that sells rooms and flights from many providers, such as Booking.com or Expedia.
Last reviewedWhat does Online travel agency (OTA) mean?
An online travel agency sells travel from many hotels, airlines and other providers in one place, earning a commission on each booking, or a margin when it buys and resells. Booking Holdings (Booking.com, Agoda), Expedia Group and Trip.com are the largest, and MakeMyTrip is a leader in India. Hotels get demand they could not reach alone but pay commission on each booking, often a double-digit percentage of the room rate, so they push guests to book directly through loyalty programs. Example: on a 200 room night at an 18 percent commission, the hotel pays 36 to the OTA; a direct booking saves most of that, minus the hotel's own marketing costs.
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Related terms
- ADR (average daily rate)The average price paid per hotel room sold.
- Take rateThe share of each transaction's value that a platform keeps as revenue.
- Network effectsA product becomes more valuable as more people use it.
- CAC (customer acquisition cost)What it costs, on average, to win one new customer.
- Prime costFood and drink cost plus labour cost, the two biggest restaurant costs.
- Table turnsHow many times each table is used by a new group in a meal period or day.
- CoverOne guest served a meal: the unit restaurants count.
- Same-store sales (comparable sales)The US name for like-for-like sales: growth at restaurants or stores open in both periods.