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Question: How do OTAs not die in the AI era? Here's my answer… (…and… | Arlen Ritchie | 11 comments

  • Arlen Ritchie
  • 20 March 2025
  • 1 minute read
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This article was written by a Hotel Marketing Flipboard. Click here to read the original article

image

Question: How do OTAs not die in the AI era? Here’s my answer…

(…and I’d love to hear counter points).

Answer: The OTAs are marketplaces that compete primarily on the basis of demand aggregation, namely:

1️⃣ user acquisition, and
2️⃣ retention.

👉 The more efficient OTAs become at those two aspects, the more resilient they will be to disruption.

Efficiency gives them flexibility to adjust their take rates down and still maintain margins, outcompete rivals, exercise market power, etc.

Expedia spends ~50%‼️of their revenue on sales and marketing, whereas Booking is ~30%. Those numbers alone don’t tell the whole story but it illustrates how much MARKETING is a key success factor for OTAs.

In the end, consumer behavior is what matters though. It feels like a growing proportion of people prefer to book direct these days than in prior years.

[Q: Is anyone else feeling or seeing this “vibe” shift?]

📈 The book direct trend will likely continue to grow, especially if aided by technology like agentic AI 🤖 that removes the friction that currently exists when booking direct.

Please click here to access the full original article.

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