Why OTAs Are Your Best Friend
The relationship between Online Travel Agencies and experience operators has become one of the most debated topics at industry conferences and in professional circles. While the hotel sector has consolidated around a small number of dominant platforms, the tours and activities space exhibits different dynamics.
Historical Context
The distribution landscape has undergone significant transformation over the past two decades. The fundamental role of intermediaries has not changed -- only their names and the reach enabled by digital technology. Mobile technology has erased the boundaries that once made in-destination sales the exclusive domain of operators, making all customers accessible through various channels right up until the moment of experience.
The Platform Economy
The economic reality of modern commerce favors platform-based models. Amazon, Uber, and Airbnb all facilitate transactions while taking a commission. What operators often call "direct" business typically relies on Google traffic -- itself a platform -- with search advertising costs running approximately 15-25% of revenue.
Key Arguments Against OTAs -- And Responses
Commission Concerns
Commission rates in the experiences sector have remained relatively stable over twenty years at around 25% for standard resellers and 30% for receptive operators. This aligns with broader industry standards where retail markup averages 50% and Amazon ranges from 6-45% by category. If 25% is unsustainable, the pricing structure likely needs adjustment rather than the distribution strategy.
Keyword Bidding
OTAs naturally bid higher on search terms because they represent multiple products and benefit from established brand trust and superior conversion rates. Venture-funded platforms can also prioritize market share over immediate profitability, giving them the ability to outbid individual operators.
Customer Ownership
Once customers arrive at an experience, they become the operator's responsibility. Operators should use on-site interactions to capture email addresses and build direct relationships, regardless of which channel originated the booking.
Communication Challenges
Two issues surface repeatedly: restricted customer contact and unilateral contract modifications. OTAs need to protect brand consistency, but should invest in proper messaging APIs. Contract changes deserve clearer, more professional communication.
Payment Timing
Most platforms pay after travel occurs because pre-travel risk falls on whoever charged the credit card. Immediate reimbursement would expose operators to refund liability. Most major OTAs now pay consistently and on time based on bookings rather than redemptions.
Direct Competition
Some OTAs now operate competing experiences. This risk highlights the importance of revenue diversification -- no single source should represent more than 20% of total income.
Strategic Recommendations
Working exclusively through direct channels is an incomplete strategy. Operators should maintain strong websites while simultaneously expanding across multiple OTA platforms. Different audiences prefer different booking channels, and only certain platforms can effectively reach specific customer segments.
The tours and activities sector differs fundamentally from accommodations. Unlike hotels, which are largely commodity products at various price points, high-quality experiences remain differentiated. There is little evidence to suggest the market will consolidate into a two-platform outcome as seen in hotels.
The bottom line: embrace the model, value the 75% you receive, and pursue bookings from every viable channel.