Briefing: OTA giants are eating up the industry
According to a report from IBISWorld, online travel agents are expected to account for 51% of the UK travel industry’s total revenue in 2015. This has risen from just 10% a decade ago. Online travel agents are now powerful entities in the hospitality world and are growing and consolidating. Industry leader Expedia has announced the acquisition of two travel agents in as many months.
In these videos, hospitality experts discuss how the OTAs have gained such power and what this means for hoteliers. Includes comment from Expedia’s Christopher Michau:
A Report by Euromonitor International ‘Online Travel Intermediaries: A Fast Changing Competitive Landscape’ found that on-line travel intermediaries grew 8% CAGR over the 2008-2013 period. This reflects activity both from OTA’s and online booking platforms owned by hotel brands. But in an industry where online booking is growing so rapidly in popularity, the OTAs more specialist expertise gives them an advantage, as discussed by Brian Reeves above.
The Euromonitor Report also states that: ‘The online travel agency sector is seeing increasing consolidation, with Expedia and Priceline emerging as its dominant players.’
For 2014, gross bookings for Expedia Inc increased by 28% from 2013 and revenue increased 21%. Currently Expedia Inc includes (among others); Expedia.com, Hotels.com, trivago (a metasearch website), and Travelocity. The last of these, Travelocity, was acquired in January 2015 for $280 million. This month Expedia has also announced an agreement to acquire Orbitz Worldwide, which comprises of a travel technology solutions company and travel planning sites such as cheaptickets.com.
The Priceline group had $39.2 billion gross bookings in 2013. The Connecticut, USA, based group owns and operates Booking.com which takes over 750,000 room nights reservations a day.
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