Shifting traveler preferences and tech-driven competition reshape the OTA landscape, according to new Phocuswright research
Aug 5, 2025
The U.S. online travel agency (OTA) market is showing signs of slowing after years of steady growth, according to new research from Phocuswright. While global expansion supports overall industry growth, domestic performance is leveling off as travelers increasingly book directly with suppliers and new technologies reshape competition.
Key takeaways
- Modest growth in 2024: U.S. OTA sales reached $108.5 billion, showing only slight year-over-year growth.
- Plateauing market share: OTAs hold 22 percent of total gross bookings, behind supplier-direct (42 percent) and offline (36 percent) channels.
- Expedia under pressure: The OTA giant faces mounting challenges from a softening market and increased competition, while Booking.com remains somewhat more insulated.
- Hotels still dominate—but may weaken: Hotel bookings remain the core of OTA revenue, but cooling demand and stabilizing rates may erode profitability.
- Tech as a competitive edge: Generative and agentic AI are becoming crucial for OTAs, enabling personalized offers, service bundling, and improved conversion rates.
- Shifts toward supplier-direct bookings: Travelers increasingly prefer booking directly with airlines and hotels, a trend that could reshape the OTA landscape through 2028.
Get the full story at Phocuswright
