What is an OTA? Online travel agencies vs travel advisors

An OTA (online travel agency) is a website or app that sells other companies' travel, such as hotel rooms, flights and rental cars, directly to travelers. Expedia, Booking.com, Priceline, Agoda and Hotels.com are OTAs. They earn commissions from suppliers, a margin when they take the traveler's payment, and advertising fees.

Here is how OTAs work, who owns the big brands, how they make money, how they differ from metasearch sites, and where travel advisors and host agencies fit.

What is an OTA?

An online travel agency sells travel it doesn't own. The hotel, airline or car company provides the service. The OTA lists it, takes the booking and handles customer service.

Expedia Group uses the term about itself. Its annual report says it began operations "as one of the first online travel agencies ("OTAs")" nearly 30 years ago. Booking Holdings uses a different label, "online travel companies" or OTCs, but describes the same business: it derives "substantially all of our revenues from providing online travel reservation services".

Neither company holds the inventory. Expedia says it has no control over the rooms and does "not bear inventory risk" on hotel bookings it sells.

Who are the biggest OTAs?

Two US-listed groups own many of the best-known brands. These are the brands each one lists in its annual report for 2025.

Not every brand on that list is an OTA. KAYAK and trivago are metasearch sites, and OpenTable books restaurants. More on that below.

Scale matters here. At the end of 2025, Booking.com listed about 4.4 million properties in over 220 countries and territories. Expedia had about 3.6 million lodging properties and over 500 airlines.

Merchant model vs agency model

Every OTA booking runs on one of two models. The difference is who takes the traveler's money.

Merchant model. The OTA charges the traveler and pays the supplier later. Under this model, Expedia says "we are the merchant of record for such bookings". Travelers pay "generally when they book the reservation." The merchant of record is the business that charges the traveler's card.

Agency model. The OTA passes the booking to the supplier, and the supplier takes payment. Here "the travel supplier serves as the merchant of record". The OTA earns "commissions or ticketing fees from the travel supplier and/or traveler."

Booking Holdings draws the same line. Merchant revenues come from "transactions where we facilitate payments from travelers". Agency revenues come from transactions "where we do not facilitate payments from travelers," and consist almost entirely of commissions on Booking.com hotel stays.

Expedia lets hotels offer both. Its program gives travelers the choice to pay Expedia in advance ("Expedia Collect") or pay at the hotel ("Hotel Collect").

How do OTAs make money?

OTAs make money three ways. Both filings say so in almost the same terms.

1. Merchant revenue. At Booking Holdings this includes commissions and "transaction net revenues," the amount charged to travelers less the amount owed to suppliers, plus payment revenue such as credit card processing rebates.
2. Agency revenue. Commissions paid by the supplier on bookings the supplier charges for.
3. Advertising and other revenue. At Booking Holdings this is mostly KAYAK referrals and ad placements, and OpenTable reservation and subscription fees. Expedia sells ad placements on its booking sites and on trivago.

The merchant side is now the bigger one at both companies.

Booking Holdings says its merchant revenue rose while agency revenue fell in 2025 "due to the ongoing shift from agency to merchant revenues at Booking.com."

The merchant model also helps with cash. Expedia receives cash from travelers at booking and generally pays hotel suppliers after the stay. It calls this cycle "a working capital source of cash to us." Payments to hotel suppliers are generally due within 30 days of check-in or stay.

OTA vs metasearch: what is the difference?

An OTA sells you the trip. A metasearch site sends you somewhere else to buy it.

KAYAK "provides online meta-search services that allow consumers to easily search and compare travel itineraries and prices from hundreds of online travel platforms at once". It earns money by sending referrals to OTAs and suppliers and from advertising, with referral revenue recognized when a consumer clicks or completes the trip.

trivago works the same way for hotels. Expedia calls it its "majority-owned hotel metasearch company", which earns advertising revenue from referrals to online travel companies and suppliers. Expedia doesn't count gross bookings for trivago because it differs from Expedia's "transaction-based websites".

So the same group can own both. Booking Holdings owns KAYAK. Expedia Group owns most of trivago.

How are OTAs regulated in the EU?

Booking.com is regulated as a gatekeeper in the EU. On May 13, 2024, the European Commission designated Booking as a gatekeeper under the Digital Markets Act (DMA) for its online intermediation service Booking.com. It is listed on the Commission's gatekeeper portal alongside Alphabet, Amazon, Apple, ByteDance, Meta and Microsoft.

Booking had six months to comply. Breaking the rules can cost up to 10% of total worldwide turnover, or 20% for repeat infringements.

The rule that matters most for hotels is about parity clauses. A parity clause stops a hotel from offering a lower price somewhere else. Article 5(3) of the DMA bans that for gatekeepers. A gatekeeper "shall not prevent business users from offering the same products or services" through other platforms or their own website "at prices or conditions that are different."

Booking Holdings says it acted on this. According to its 2025 annual report, Booking.com "has implemented changes to address the DMA prohibition on parity arrangements" in the European Economic Area (EEA).

What this means for agencies: In the EEA, a hotel listed on Booking.com is free to offer a different price through its own site or through other channels. Outside the EEA, check the specific market.

OTA vs travel advisor vs host agency

An OTA is software you book through yourself. A travel advisor is a person who plans and books for you. A host agency is the company many independent advisors book through. "Online travel agent" can mean either an OTA or an advisor who works online, as online travel agent explains.

The US Department of Labor's O*NET describes travel agents as people who "plan and sell transportation and accommodations for customers" and determine destinations, dates, costs and accommodations. A host agency gives independent advisors the accreditation and supplier access to book. See how host agencies work.

For advisors, the merchant of record depends on who charges the traveler's card. See how travel agencies collect payments.

OTAs and advisors aren't always rivals. Expedia's business-to-business segment serves "offline travel agents", including through its agent booking tool, TAAP. On that program, agents earn commission on total booking value, including taxes and fees. Booking Holdings, for its part, lists traditional travel agencies among its competitors.

When does a traveler choose an OTA or an advisor?

This is practical guidance, not survey data.

An OTA fits a simple trip the traveler can plan alone: one hotel, one flight, flexible dates, and a traveler who is happy to compare prices and handle changes through an app.

An advisor fits when the trip has many moving parts. Think multi-city itineraries, groups, honeymoons, cruises, or trips where something going wrong is expensive. The traveler is paying, in time or fees, for judgment and for someone to call.

What this means for advisors: Don't compete with OTAs on search. Compete on planning, supplier knowledge and support during the trip. Those are the parts a self-service booking site doesn't sell.

If you're thinking about starting your own agency, start with the full guide.

How Tripdash fits

Tripdash lets advisors book flights, hotels, activities, rides and restaurants in one search, with no IATA code required. See how Tripdash works.

Sources

1. Booking Holdings Inc. Form 10-K for the fiscal year ended December 31, 2025, filed February 18, 2026. Item 1 (Business), Item 1A (Risk Factors), Item 7, Note 2.
2. Expedia Group, Inc. Form 10-K for the fiscal year ended December 31, 2025, filed February 13, 2026. Item 1 (Business Models), Item 7, revenue recognition note.
3. European Commission. Commission designates Booking as a gatekeeper and opens a market investigation into X, May 13, 2024.
4. European Commission. Gatekeepers portal, Digital Markets Act, accessed October 2026.
5. Official Journal of the European Union. Regulation (EU) 2022/1925 (Digital Markets Act), OJ L 265, October 12, 2022. Article 5(3).
6. US Department of Labor, O*NET OnLine. Travel Agents, 41-3041.00, updated 2026.
7. Expedia Group. Expedia TAAP, accessed October 2026.
8. Visa. Dispute management guide for merchants, October 2026.