Online Travel Reservation Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 1,400 online travel reservation service providers facilitate travel purchases between travelers and a wide range of travel resources, including airline seats, lodging, rental cars, and tours. Through websites and mobile applications, online travel agencies (OTA) use proprietary technology to streamline the travel booking process and provide a one-stop platform for researching, comparing, and reserving travel services. Lodging reservations account for the vast majority of revenue.
Dependence on Changing Technology
OTAs depend on sophisticated technology to support and enable customer interaction and manage data from different travel suppliers on a single platform.
Travel Industry Recovery Ongoing
The post-pandemic recovery of the US travel market is ongoing, with the leisure market bouncing back faster than the business and group travel markets.
Industry size & Structure
The average online travel reservation service provider operates out of a single location, employs about 40 workers, and generates about $18 million annually.
- The online travel reservation services industry consists of about 1,400 firms that employ about 56,000 workers and generate $25 billion annually.
- The industry is concentrated with the top 50 companies accounting for about 70% of industry revenue.
- Large companies include Booking.com, Airbnb, Expedia, and AAA.
- Household consumers and individuals account for almost 60% of industry revenue, businesses account for 23%, and travel agencies and other resellers account for 16%. Less than 3% of establishments are franchises.
- Because of the global nature of travel, large firms typically have operations in foreign countries.
Industry Forecast
Online Travel Reservation Services Industry Growth
Recent Developments
Feb 3, 2025 - Music Tourism is a Growing Niche
- Music tourism is a growing niche in the travel industry and is expected to be a key driver for in 2025, according to industry experts. Taylor Swift’s mega-grossing Eras tour spurred fans to buy tickets outside of their home/nearby concert market, taking advantage of cheaper tickets and hotels in other US cities and overseas. A new survey from online travel agency justify.com finds that about 75% of respondents would travel for a concert if it was cheaper away from home. Another 60% say music festivals are becoming a key reason for travel. The impact of music tourism on local economies can be significant. The California Center for Jobs & the Economy found that Swift’s six-night run in Los Angeles in 2023 generated $320 million to the local economy. Other stops on Swift’s tour reported similar local boons including Australia ($765 million), London ($380 million), Japan ($228 million), and New Orleans ($200 million).
- The Federal Trade Commission in December announced a final rule banning junk fees on hotels, short-term rentals, and live event tickets. According to the FTC, the Rule on Unfair or Deceptive Fees prohibits bait-and-switch pricing and other tactics used to hide total prices and bury junk fees in the live-event ticketing and short-term lodging industries. “The FTC’s rule will put an end to junk fees around live event tickets, hotels, and vacation rentals, saving Americans billions of dollars and millions of hours in wasted time,” said outgoing FTC Chair Lena Kahn, The rule targets “resort,” “convenience,” or “service” fees that inflate the advertised price and typically don’t appear until the end of the transaction. The rule does not prohibit any type or amount of fee, nor does it cover rental cars or airline tickets. The rule becomes effective 120 days after it’s published in the Federal Register.
- Employment by online travel reservation services grew 3.4% in October compared to a year ago, while average industry wages were relatively unchanged over the same period – dipping 0.2% year over year – to $30.01 per hour, according to the latest US Bureau of Labor Statistics data. Following three years of double-digit growth, sales for the US industry are forecast to slow but still grow at a 5.93% compounded annual rate from 2024 to 2028, faster than the growth of the overall economy, according to Interindustry Economic Research Fund, Inc.
- A new survey suggests traditional travel agents may be staging a comeback, with younger travelers preferring the in-person service and expertise travel advisors provide to booking travel themselves online. The survey commissioned by IBS Software, a software provider for airlines, cruise lines, and other transportation providers, found 38% of millennials (1981-1996) and Gen Z (1997-2012) are opting to use traditional travel agents rather than booking themselves online. That figure is significantly higher than the 12% of Gen X and 2% of baby boomers who said they use a traditional travel advisor. Gen X (1965-1980) far prefers to use OTAs when booking their holiday travel (35%). This renaissance of the travel agent amongst the younger generation has contributed to just 22% of respondents booking hotel stays and airline tickets directly through their vendor’s websites, the study found.
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