OTA growth market appears at or near peak
Traditional OTAs are feeling the impact of increasing competition, lower commission and emerging channels. Now they need to pour in more capital than ever to stay on top.
All signs point to a stalled, or at least slowed, growth market for online travel agencies.
The most recent evidence came Friday when Expedia and Travelocity announced they would consolidate their businesses. Expedia will handle most of Travelocity's operations, from running searches to answering customer inquiries to processing bookings; in turn, Travelocity will largely become a brand aimed at attracting customers to its website. Expedia will collect the related fees from airlines and hotels and then pay a commission to Travelocity.
Consolidations such as this typically don’t occur in a growth market.