OTA Meaning Explained

OTA meaning

By The Hospitable Team

Online travel agencies (OTAs) are very popular among travelers because they offer an easy and convenient way to arrange their stay from the comfort of their home via the internet. Year after year, online travel agencies are increasing their customer base and their volume of business.

If you are looking to start a vacation rental business, you should know that listing your rental property on OTA websites will open the door for many opportunities and experiences. And the best thing is that it will allow you to reach more potential guests and get more bookings. So what is an OTA?

In this article, we’ll explain the OTA meaning and provide you with basic information about how they work.

What Is OTA?

OTA stands for online travel agency. It is a web-based marketplace that allows users to research and book travel products and services directly from suppliers.

OTAs arrange and sell accommodations, tours, flights, cars, cruises, activities, and trips on an online platform for travelers. They are third parties who sell services on behalf of other companies and vacation rental property owners.

Such well-known OTAs as Booking.com, Airbnb, TripAdvisor Rentals, Vrbo, Expedia, and FlipKey specialize in renting temporary housing to travelers.

Check out this article to learn more about the best rental listing sites for hosts.

How Do OTA Channels Work for Vacation Rental Owners?

Investing in a vacation rental property is a great way to earn extra income and build a successful business. And thanks to OTA websites, making money in short-term rentals has become easier than ever before. They allow you to create a rental business under their umbrella and provide everything you need to market your business.

Some agencies allow rental owners and property managers to join their community and list and advertise their properties for free, while some other agencies require paying them upfront.

The OTA channels typically use a commission-based model to earn money. They take a commission on every booking. As to rates and pricing, they vary between different OTA platforms, and commission may range from approximately 3% to 25%.

For example, Vrbo offers hosts two pricing models: an annual subscription that costs $499 and is paid in advance and a pay-per-booking with a commission starting 8% per booking.

How to List Your Rentals on OTAs

Each OTA has its own specific guidelines. But typically, a sign-up process is rather simple. You need to provide details about your property and then create a precise listing description. You also have to upload professional photos of your house or apartment to attract potential guests and set your prices.

You should also make sure that you have the necessary amenities to make your guests feel comfortable. In this host checklist, you’ll find a list of essentials that you should provide to impress your guests. It’s also essential to give your house a deep clean. You can use our cleaning checklist to ensure you keep your property guest-ready.

Ensure your property is short-term-rental-ready. Furnishing a short-term rental apartment is different from the place you live in yourself. Check our guide on preparing your apartment for short-term rental business—it will save you from extra expenses.

If you want to grow a successful vacation rental business, you should list your property on multiple OTAs. This way, you’ll be able to get more bookings and earn more money, although managing multiple listings can take quite a bit of time. You need to be quick responding to guests’ requests, keep your availability calendars in sync between OTAs, effectively manage your cleaning and maintenance teams.

But you’ll be able to save a lot of time and improve your guests’ experience if you use automation tools like Hospitable.com.

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How Does the Booking Process Work?

After you complete the registration, you can publish your listings and be ready to accept bookings. You’ll have to wait for booking requests from potential guests. You can also enable instant bookings and let travelers instantly book your property without requiring your approval. Then you’ll receive reservations rather than requests.

Travelers typically search for vacation rentals based on date, location, and the number of guests they can accommodate. But OTA platforms may also offer them to apply a variety of additional filters, for example, room type, amenities, and facilities.

Hosts can communicate with prospective guests through the OTA channel inbox. And with some platforms, once guests have made a booking, they will be able to have access to the contact information that you’ve provided in your listing. Then they can reach out to you personally, either via phone, text message, or email.

How Do Hosts Get Paid for Bookings Made Through OTAs?

OTA channels have different payment policies. Some OTAs will process payments on your behalf and then release your part of the revenue at a certain stage in the reservation. Others may allow you to process the payments from your guests independently. Hosts can choose how they want to be paid, for example, via credit card or bank transfer.

How Do Hosts Get Reviews?

Prospective guests often base their booking decisions on other guests’ reviews. So after your guests check out, you should kindly request that they review you on the original booking channel. In some cases, the OTA will reach out on your behalf and ask guests to rate their experiences. And if you use Hospitable.com, our system will automatically remind your guests to leave a review using your template.

In addition, you will often be prompted to review your guests because guest reviews help hosts understand how trustworthy and responsible prospective guests are before accepting their booking requests.

Bottom Line

OTAs receive millions of website visitors every month from all over the world. That’s why listing your short-term rental property on multiple OTA channels will allow you to get more exposure and generate maximum income. You will be able to reach a wider audience that you wouldn’t have otherwise reached. And that leads to more bookings and more revenue.

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