More outsiders enter the OTA market

A preview of Phocuswright's research report No Travel Experience Necessary: More Outsiders Enter the OTA Market

By Lorraine Sileo & Phocuswright Research

Non-travel brands, such as financial institutions, retailers and loyalty clubs, must really want to get into the travel business. Over the past two years, several have launched travel booking platforms or announced ambitious plans to do so, even though the online travel agency market is already near saturation and uber competitive. Will they succeed? If so, what are their advantages and what will be the impact on the marketplace?  

Get the full report: No Travel Experience Necessary: More Outsiders Enter the OTA Market

Any new OTA is often met with skepticism, but that hasn’t stopped a slew of new hopefuls from other sectors such as banking, retail and membership organizations from taking a shot. Can they compete with the big brands? Do they even need to? 

Ironically, it’s the existing players – Expedia, Booking and Hopper – that have the most to gain from this trend. Plug-and-play options offered by Expedia for Business, Rocket Travel (Booking.com) and Hopper Cloud make it easy for institutions and organizations to provide private-label travel offerings with little or no expertise.

Most OTAs’ private-label partners are travel suppliers such as airlines and agencies looking to supplement inventory and revenue. But the others represent the long tail, including non-travel brands such as banks, retailers, rewards programs and membership-based organizations seeking to add value to their current offerings and further monetize their existing audiences. Most of these non-travel companies don’t expect to compete with the giants, or even to make a lot of money. Rather, their goal is to provide a convenient service to customers, so they keep coming back.

We Are All Travel Brands

The full report gives a detailed look at the following companies:

Washington, DC-based AARP offers special discounts to its 38 million members via the AARP Travel Center Powered by Expedia

Big box retailer Costco, with its 119 million members, sells travel services through its Costco Travel portal.

A relatively new online offering in the non-travel category is from T-Mobile, indicating that even phone companies want to sell travel (again) (see Figure 2). 

Walmart was a trendsetter but travel is no longer an option on the Walmart U.S. website. However, Walmart did make another move when its Flipkart subsidiary acquired Mumbai-based OTA Cleartrip in 2021; the Middle East business was recently sold to Wego in 2022.

Amazon, with its 150 million+ members, was speculated to be a big travel competitor, but that has (so far) not materialized, though it does sell travel in India via partnerships with MakeMyTrip and Indian Railways.

Even Google left the scene (for now) by discontinuing Book on Google for flights and hotels. 

Banking and Travel: A Marriage of Convenience 

Most newcomers in the OTA space are financial institutions, and for good reason. They already have a captive audience of consumers who use their cards to pay for travel products. By offering travel bookings themselves, they can boost card usage and earn commissions at the same time. Highlights in the full report include:

  • JPMorgan Chase & Co.
  • Capital One
  • Citi
  • Expedia to add more partners

The Long Tail Gets Longer 

Considering the proliferation of plug-and-play platforms, white-label offerings and API integrations, it’s no wonder that becoming an OTA is hard to resist. The advantages for banks, rewards programs, retailers and other membership organizations to offer additional value with little up-front cost are obvious. And more offerings are anticipated to launch in the coming months and years.

  • But just how big can these new offerings get?
  • Will their quest to create pockets of loyalty work in travel, where consumers are well-trained to go to existing OTA and supplier brands?

The full report gives an overview of Popular "White Label" Travel Offerings

It's unlikely that these bank and rewards-based offerings will make a huge splash individually, especially since OTAs and suppliers have their own competing loyalty programs. 

But they could, in aggregate, generate a ripple effect as travelers choose to shop, pay and redeem rewards all in one place. Just don’t expect anyone to replace the mega-OTAs anytime soon; if anything, these developments will only make them bigger. 

This article is part of a content series that explores some of the most impactful innovation and technology-driven trends that will influence the travel industry in 2023 and beyond.

Watch the online event that covered each trend, presented by Phocuswright analysts:

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