Hotel Bookings and the Dominance of the OTAs

Over the past two decades, the online travel agency (OTA) segment has grown to be the dominant channel for hotel bookings. Changes in full content agreements between hotels and OTAs, commonly called rate parity agreements, are reviewed. Is an OTA a friend or foe of hotels? Many small chains and independent hotels are dependent on the OTAs to deliver bookings. This chapter examines the fragmentation of the lodging industry that led to the negotiating power and dominance of the OTAs. The merchant model, pay at check-in model, and the opaque model are reviewed. The chapter concludes with a discussion on the role of metasearch and Google in the lodging industry and the diminishing role of the billboard effect.