What Is an OTA? Online Travel Agencies for Hotels Explained

Anyone running a hotel can hardly avoid them: Booking.com, Expedia, HRS. In the industry, these booking platforms are called OTAs. They bring in guests from all over the world, but every booking comes at a price. This glossary entry explains how the model works, how large their share has become and what has changed in the law.

How an OTA works

OTA stands for online travel agency. The hotel lists its rooms, rates and photos on the platform, and guests search, compare and book there. For every booking it brings in, the hotel pays a commission. The rate is set out in the contract and depends, among other things, on the platform, the country and any visibility programmes the hotel has signed up to.

Depending on the model, guests pay at the hotel or when they book through the platform. According to the European hotel distribution study, 65 per cent of the hotels surveyed use Booking Holdings’ payment system and 43 per cent use Expedia Collect.¹

How large the platforms’ share is

The European Hotel Distribution Study is published every two years. For the latest edition, the European hospitality association HOTREC and the university of applied sciences HES-SO Valais-Wallis analysed data from 2,713 hotels for 2025. In Germany, 31.9 per cent of all hotel bookings were made via OTAs, while 59.7 per cent came direct to the hotel. Across Europe, the OTA share was 29.9 per cent.²

The market is highly concentrated. In Germany, Booking Holdings accounted for 70.5 per cent of OTA bookings, with Booking.com alone at 69.2 per cent. Expedia Group followed with 11.1 per cent and HRS Group with 9.9 per cent.²

The case for and against platforms

Reach: platforms make even small properties visible internationally, with reviews, translations and advertising that a single hotel could hardly fund on its own.

Costs: every booking costs commission. Many businesses do not know exactly how much this adds up to over a year.

Cancellations: across Europe, the cancellation rate for bookings via Booking.com was 19.0 per cent, compared with 9.1 per cent for direct bookings via the hotel’s own website.²

Rates: 51 per cent of the hotels surveyed in Europe report that platforms undercut their rates often or occasionally.¹

What has changed in the law

For a long time, platforms required so-called parity or best-price clauses: hotels were not allowed to offer their rooms more cheaply elsewhere. In 2021, Germany’s Federal Court of Justice also ruled Booking.com’s “narrow” best-price clause unlawful.³

On top of that comes the EU’s Digital Markets Act. In May 2024, the European Commission designated Booking.com as a so-called gatekeeper, and since 14 November 2024 parity clauses of any kind have been banned. Hotels in the European Economic Area may now set their prices and conditions freely on and off Booking.com, for example offering lower rates on their own website.⁴

How hotels can use platforms deliberately

More in the magazine

How hotels actually come across on Booking.com and Expedia, and why their profiles often differ, is the subject of our article "What Does Your Hotel Really Look Like to Guests?". The software that connects the platforms to the hotel is explained in the glossary entry "What Is a Hotel PMS?". Why the European Commission has opened proceedings against Booking.com and what role verified hotel stars play is shown in "Verified hotel stars move into focus as the EU investigates Booking.com".