OTAs has remained vital to the European travel distribution landscape, irrespective of the challenges faced by the online direct channel especially in the highly disintegrated hotel & lodging segment. As per the Phocuswright's latest travel research report Europe Travel Market Report 2020-2024, in 2020, OTAs captured roughly 64% of online hotel & lodging bookings, in a segment of smaller, non-chain properties that do not focus on driving direct online bookings. Due to several other reasons OTAs have struggled to grow online market share in other segments as well. In the tour operator segment, pre-packaged holidays represent a clear opportunity for OTAs.
The extensive hotel closures and limited air travel availability has severely limited OTA product supply in 2020. There will be quick escalation in the demand for leisure travel as the vaccination rates in Europe has improved and the infection rates has dropped which can be strong recovery for OTAs. Given OTAs' strong focus on flights and accommodation, recovery is closely tied to the performance of those segments. In 2021, OTA bookings are projected to climb 55%, with more modest (yet still double-digit) gains in subsequent years.
Source: Phocuswright
Author: Sathish Kumar .S
Sathish works as Project Manager in Teknokraaft and heads our OTA team