Three key developments in the US OTA market

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OTAs showed a welcome recovery in 2021, supported by continued strength in domestic travel. After ending 2020 down 58%, US OTA bookings nearly doubled despite the ups and downs of another pandemic year. According to Phocuswright’s latest travel research report on the U.S. Online Travel Agency Market Report 2021-2025 segment, OTAs generated $65.2 billion in gross bookings in 2021, reaching 82 % of pre-pandemic levels (2019).

Three key developments in the US OTA market:

Full service is no longer alone

Expedia has long offered a near-full range of travel products through its flagship site Expedia.com, allowing customers to book multiple products for one trip, while its US competitors have shifted heavily towards a single product line.

Booking.com and HotelTonight have been anchored in accommodation, Hopper and CheapOair in flights. However, both Booking.com and Hopper have made great strides in expanding into full-service OTAs, putting further pressure on Expedia.

Money talks: sales, acquisitions and investments

2021 has been a year for OTAs to review portfolios and reduce or supplement their offerings. For Expedia Group, the goal was to simplify operations to operate more effectively as a family of brands and to invest in businesses where they are best positioned to win.

Conversely, Booking Holdings opened its portfolio by spending more than $3 billion on acquisitions and investments in 2021.

Hopper, which plays on a much smaller scale compared to Expedia and Booking but has big ambitions, has also joined the acquisition game, while raising $345 million in 2021 between its Series F of March and Series G of August.

Visits, activities & attractions: the remix

Not so long ago, the Tours, Activities and Attractions segment was seen as the next big source of growth in the travel industry. The category flourished in 2018, and OTA giants, including Booking and Expedia, vied for position as leaders.

Since then, both OTAs have changed their approach to offering activities. Rather than sourcing directly, Expedia and Booking have largely turned to partnerships with activity-based travel agencies. While changes were already in play before the pandemic, OTAs have further strengthened the partnership approach in 2021.

Hopper, on the other hand, entered the space with its acquisition of PlacePass. PlacePass was most notable as a power source for Marriott’s tours and activities booking platform, which Hopper will now power.

OTAs continue to regain share of the total online market during the 2021 travel recovery. However, it is important for travel agencies to be aware that supplier websites have retained their majority stake in the US online travel market. with a 63% share of gross online bookings. This report helps companies understand how providers and OTAs compete, differentiate and deliver new value to travellers. The United States Online Travel Agency Market Report 2021-2025 by Phocuswright provides a comprehensive view of the United States OTA landscape, including detailed market size and projections, distribution trends, key developments and Moreover.

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