An online travel agency, usually shortened to OTA, is a website or app that sells travel products it does not own. Hotel rooms, flights, rental cars, holiday packages and activities come from thousands of separate suppliers; the OTA aggregates their prices and availability, lets a traveller compare and book in one place, and earns either a commission from the supplier or a margin on the price. Booking.com, Expedia, Hotels.com, Priceline, Agoda and Trip.com are the best-known examples. The model exists because a single independent hotel cannot reach travellers in dozens of countries alone, and travellers want to compare options in one place.

For advertisers, OTAs matter as some of the largest buyers of search advertising, and their dependence on Google and now AI assistants keeps them at the centre of competition law.

How an OTA makes money

Two commercial models dominate, and most large OTAs run both.

Under the agency model, the OTA passes the reservation to the hotel and the traveller pays the property directly, usually at check-in or check-out. The hotel then owes the OTA a commission on the stay. Commissions on Booking.com typically run between 10 and 15% of the room price, a range cited in coverage of a Berlin court ruling that 1,099 hotels can claim damages from Booking.com.

Under the merchant model, the OTA takes the traveller's payment at the time of booking and becomes the merchant of record. Expedia's 2025 annual report describes contracts with suppliers that provide rates and availability, with travellers generally paying Expedia when they book; Expedia carries no inventory risk because it does not buy the rooms in advance. The OTA keeps the difference between the traveller's price and what it remits, plus payment and ancillary fees.

The balance between the two has shifted. Booking Holdings reported merchant revenues of $17.76 billion in 2025, up from $14.14 billion a year earlier, while agency revenues fell from $8.52 billion to $7.97 billion, according to its fourth-quarter earnings release. At Expedia Group, merchant revenue made up 70% of total revenue in 2025 and agency revenue 22%, according to its Form 10-K, with most agency bookings coming from air travel.

A third line has grown quietly. Both groups sell advertising. Booking Holdings reported $1.19 billion in "advertising and other" revenue in 2025, mostly from KAYAK referrals and advertising and from OpenTable. Expedia Group's own advertising and media business brought in $758 million, and its majority-owned metasearch site trivago a further $417 million. OTAs are now sellers of commerce media, not just buyers.

The scale of the marketing bill

OTAs spend heavily to acquire each booking. Booking Holdings recorded marketing expenses of $8.19 billion in 2025 against revenues of $26.92 billion, about 30 cents of every dollar of revenue. Expedia Group's direct selling and marketing expense reached $7.35 billion on revenue of $14.73 billion, roughly half. Booking processed 1.235 billion room nights and $186.1 billion in gross bookings that year; Expedia booked 415.4 million room nights and $119.6 billion in gross bookings.

Much of it goes to performance marketing: paid search, Google Hotel Ads and metasearch placements, where OTAs bid against hotels and each other for the same traveller. Google has repeatedly reshaped those auctions. Hotel ads became a Google Ads campaign type in July 2018, with price feeds managed through a new Hotel Center. Commission-based bid strategies, which let advertisers pay only when a stay was completed, could no longer be chosen for new campaigns from April 30, 2024 and were switched off on February 20, 2025, according to the Google Ads Help Center. Travel feeds were extended to Search ads for all hotel advertisers in October 2024, and on April 30, 2026 Google announced Search Campaigns for Travel, folding travel formats into standard Search campaigns with AI Max.

In a UK survey of 1,000 travel marketers, own websites and OTAs such as Booking.com accounted for most conversions across every business size, as Impression's 2026 travel report found.

Origins and consolidation

The category is almost exactly 30 years old. Microsoft launched Expedia on its MSN network in October 1996, and in the same year a University of Twente student, Geert-Jan Bruinsma, started Bookings.nl in Enschede, the business that became Booking.com. Priceline.com, founded by Jay Walker around its "Name Your Own Price" bidding model, went public on March 31, 1999.

Expedia's move into the merchant model came with its August 2000 acquisition of Travelscape. USA Networks, later IAC, took control of Expedia in 2001 to 2003 and spun it out again in August 2005. In July 2005 Priceline bought Booking.com for about $133 million.

Priceline bought Agoda in 2007 and announced a $1.8 billion purchase of KAYAK in November 2012. Expedia took a majority stake in trivago around the turn of 2012 to 2013, then bought Travelocity for $280 million in January 2015, closed its $1.6 billion purchase of Orbitz in September 2015, and agreed to buy HomeAway for $3.9 billion two months later. Priceline renamed itself Booking Holdings in February 2018.

In the European Commission's 2022 figures, Booking held 60 to 70% of hotel OTA bookings in the European Economic Area and Expedia 10 to 20% on the business side. They underpinned the Commission's September 2023 block on Booking's planned purchase of flight OTA Etraveli, which the General Court upheld on September 9, 2026.

Parity clauses and the antitrust record

The longest-running dispute concerns rate parity. Booking.com's early contracts contained "wide" clauses barring hotels from offering a lower price on any other channel. Competition authorities in France, Sweden and Italy accepted Booking's offer to drop them in April 2015, and from July 1, 2015 Booking switched to "narrow" clauses that covered only the hotel's own website. Germany's Federal Cartel Office ruled even narrow clauses unlawful on December 22, 2015, a decision the Federal Court of Justice upheld on May 18, 2021.

The Court of Justice of the European Union settled the wider question on September 19, 2024 in case C-264/23. Neither wide nor narrow parity clauses had been shown to be "objectively necessary" for a hotel booking platform, the court said, and wide clauses "carry the risk of ousting small platforms and new entrants". Spain's competition authority had fined Booking.com 413.24 million euros two months earlier, on July 30, 2024, over parity and ranking practices; Booking said it would contest the fine in court. In Berlin, the regional court ruled on December 16, 2025 that 1,099 of 1,288 hotel claimants were entitled to damages for clauses applied between 2013 and early 2016.

The Digital Markets Act has since made parity bans automatic. The Commission designated Booking a gatekeeper for Booking.com on May 13, 2024, and from November 14, 2024 Booking has been required to let hotels and car rental firms offer better prices on other channels, including their own websites, according to the Commission.

Dependence on Google

Google is both supplier of traffic and competitor. Expedia's 10-K warns that Google's own travel features could reduce traffic to its sites; Booking's says Google ties travel search to its search engine and Gemini.

The DMA has cut both ways. When Google removed rich hotel units from European results to comply with the self-preferencing ban, Mirai data showed hotels in DMA regions suffering a 30% drop in clicks and a 36% fall in direct bookings, an outcome PPC Land reported as increasing reliance on intermediaries. Travel technology groups, OTAs among them, argued the reverse problem: Google's hotel usage had climbed to 80% by 2023 and Google kept favouring its own units. Sources disagree on the starting point; HOTREC data put Google's share at 37% in 2013, while figures compiled by eu travel tech put it at 10%. On July 23, 2026 the Commission fined Google 460 million euros for self-preferencing in Search, part of a combined 890 million euro decision, and named lodging and flights among nine affected services. See also Explaining self-preferencing.

Not the same as

Metasearch engine. KAYAK, trivago and Google Hotels compare prices from OTAs and hotels but generally do not take the booking; they earn per click or per referral. An OTA sells the reservation.

Travel management company. A TMC manages business travel for employers under contract, applying travel policies and negotiated rates. An OTA serves the general public.

Direct booking. A reservation on a hotel's or airline's own site or app, with no intermediary commission; "book direct" campaigns aim to pull guests away from OTAs.

Vertical listings portal. PPC Land's vertical listings portal explainer covers single-category sites that charge suppliers to appear but take no share of the sale. The abbreviation OTA also means "over-the-air" in broadcasting and software updates, an unrelated usage.

Recent developments

The fight has moved to AI assistants. Booking.com and Expedia were among seven launch partners when OpenAI introduced apps inside ChatGPT on October 6, 2025. Google announced on November 17, 2025 that it would bring flight and hotel booking into AI Mode with partners including Booking.com and Expedia, and on August 27, 2026 AI Mode began completing hotel bookings in the US with ten partners: five OTAs (Booking.com, Expedia, Hotels.com, Priceline and Trip.com) and five hotel chains. The OTA or hotel remains merchant of record, while Google runs the checkout through Google Pay. Commission terms and ranking rules were not disclosed. See Explaining AI Mode.

Autonomous booking still has limits. Researchers found agents struggled with seat selection and hidden prices, and travel sites face heavy bot abuse: HUMAN measured stolen-card testing at 17.6% of checkout traffic on the most targeted sites in 2025. In Europe, 18 groups including eu travel tech wrote to the Commission in March 2026 urging faster DMA enforcement.

Timeline

  • 1996: Geert-Jan Bruinsma founds Bookings.nl in Enschede, the Netherlands, the forerunner of Booking.com.
  • October 1996: Microsoft launches Expedia on the Microsoft Network.
  • March 31, 1999: Priceline.com goes public.
  • November 1999: Expedia goes public, with Microsoft keeping a majority stake.
  • August 2000: Expedia acquires Travelscape, moving into the merchant model.
  • 2001 to 2003: USA Networks, later IAC, takes control of Expedia and buys the remaining shares.
  • July 2005: Priceline acquires Booking.com for about $133 million.
  • August 2005: IAC spins off Expedia.
  • 2007: Priceline acquires Agoda.
  • September 2012: UK Office of Fair Trading issues a statement of objections against Booking.com, Expedia and IHG over discounting restrictions.
  • November 2012: Priceline announces its $1.8 billion purchase of KAYAK.
  • Late 2012 to March 2013: Expedia takes a majority stake in trivago.
  • January 2015: Expedia buys Travelocity for $280 million.
  • April 2015: French, Swedish and Italian authorities accept Booking.com's commitment to drop wide parity clauses.
  • July 1, 2015: Booking.com switches to narrow parity clauses.
  • September 17, 2015: Expedia closes its $1.6 billion Orbitz acquisition.
  • November 4, 2015: Expedia agrees to buy HomeAway for $3.9 billion.
  • December 22, 2015: Germany's Federal Cartel Office rules narrow parity clauses unlawful.
  • February 2018: Priceline Group renames itself Booking Holdings.
  • July 2018: Hotel ads become a Google Ads campaign type.
  • May 18, 2021: German Federal Court of Justice upholds the cartel office decision.
  • September 25, 2023: European Commission blocks Booking's acquisition of Etraveli.
  • May 13, 2024: Commission designates Booking a DMA gatekeeper for Booking.com.
  • July 30, 2024: Spain's CNMC fines Booking.com 413.24 million euros.
  • September 19, 2024: CJEU rules in case C-264/23 that parity clauses are not ancillary restraints.
  • November 14, 2024: Booking's DMA obligations, including the parity ban, take effect.
  • February 20, 2025: Google switches off commission-based hotel ads bid strategies.
  • July 7, 2025: eu travel tech calls for stricter enforcement against Google.
  • October 6, 2025: OpenAI launches apps in ChatGPT with Booking.com and Expedia among partners.
  • November 17, 2025: Google announces planned flight and hotel booking in AI Mode.
  • December 16, 2025: Berlin Regional Court rules 1,099 hotels can claim damages from Booking.com.
  • April 30, 2026: Google announces Search Campaigns for Travel.
  • July 23, 2026: Commission fines Google 890 million euros under the DMA, including 460 million euros for Search self-preferencing.
  • August 27, 2026: Google AI Mode begins completing US hotel bookings with ten partners.
  • September 9, 2026: General Court upholds the Etraveli prohibition.

Summary

Who: Online travel agencies such as Booking.com, Expedia, Hotels.com, Priceline, Agoda and Trip.com, owned mainly by Booking Holdings, Expedia Group and Trip.com Group, selling inventory from hotels, airlines and other suppliers.

What: Intermediaries that aggregate and sell travel products they do not own, earning commissions under the agency model or margins under the merchant model, and increasingly selling advertising too.

When: The category dates from 1996, when Expedia and Bookings.nl launched; consolidation ran from 2005 to 2015, and regulation intensified from 2015 onward, with DMA obligations for Booking from November 14, 2024.

Where: Worldwide, with the sharpest legal disputes in the European Union, where Booking holds 60 to 70% of hotel OTA bookings according to the Commission's 2022 figures, and with OTAs now competing inside Google's AI Mode and ChatGPT.

Why: OTAs give suppliers global reach and travellers one-stop comparison, but they spend billions on search advertising, depend heavily on Google, and have faced parity-clause and gatekeeper rules aimed at restoring hotels' freedom to set their own prices.