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Deconstructing The Online Travel Market's Revenue Models

A thorough analysis of Online Travel revenue models reveals a multifaceted approach to monetization that goes far beyond a simple booking fee. The most prevalent model for Online Travel Agencies (OTAs) is the agency or commission model, where the platform earns a predetermined percentage of the booking value from the supplier (e.g., a hotel or airline) after the customer has completed their stay or flight. Another key approach is the merchant model, where the OTA purchases inventory from suppliers in bulk at a wholesale rate and then sells it to consumers at a markup, giving them more control over pricing and potentially higher margins.
Beyond these primary transaction-based models, the industry utilizes several other significant revenue streams. Metasearch platforms, which do not process bookings themselves, operate primarily on an advertising model. They charge OTAs and direct suppliers on a cost-per-click (CPC) or cost-per-acquisition (CPA) basis for the valuable traffic they refer.…


