A Brief History of OTAs, Their Impact on Hotels, and the Campground Industry’s Decision

July 11, 2023

Imagine a time when real people actually picked up the telephone and called other real people to book travel accommodations. 

I know! Crazy, right?

Those days seem like a distant memory now. Thanks to online travel agencies (OTAs), you can reserve space on planes, trains, and automobiles at the touch of a button. You can even wait until the last minute—if you’re feeling lucky.

But did this ability to book anything, anytime, from anywhere come at a price? And if so, who picked up the tab?

A Brief History of OTAs

During the mid-1990s, the internet shifted from a tool used primarily in the workplace to a convenience that enhanced the home as well. Suddenly, short phrases ending in .com became a part of everyday vocabulary. 

Well-known travel brands jumped on the .com bandwagon and created websites with limited online reservation capabilities. Piggybacking off that technology, OTAs entered the conversation. OTAs promised to help travelers simply locate accommodations at competitive prices. 

Things exploded from there.

“(In 1996, it was Microsoft), the most high-profile technology company on the planet at the time, that realized there was probably something in this early momentum and unveiled its attempt at an online travel agency known as Expedia,” said Kevin May, Co-Founder and Editor of Tnooz.com. “The rest is history.”

Initially, hotels used OTAs as an uncomplicated way to put their inventory in front of online shoppers. The partnership worked beautifully—at first.

Counting the Cost

Before long, commissions paid out to OTAs became the hotel industry’s second-largest expense, coming in just behind labor costs. And according to a 2016 essay called The Definitive Oral History of Online Travel, OTAs created a state of affairs “where the business of providing a good or service (was) significantly less profitable than the business intermediating its sale.”

By 2020, OTAs were believed to control 94% of all online hotel bookings. 

Hoteliers found themselves caught between the benefit of increased bookings and the desire to regain control of their business. To address this conundrum, they came up with strategies to incentivize direct bookings. 

Exclusive perks such as complimentary Wi-Fi, room upgrades, and loyalty programs enticed guests to book directly through a website or call center. By doing so, hotels aimed to reestablish a direct connection with their customers and reduce their reliance on third-party platforms.

Ultimately, hotels had the core technology for reservation software on their side, so they upgraded their online booking systems to streamline their processes and enhance the guest experience. Now they’re leveraging that technology to regain control of their distribution—but it continues to be an uphill battle. 

And it’s certainly not over.

“[OTAs] will do anything to be a part of the sales path,” said industry analyst, Cindy Estis. “If you collaborate with them, you have to do it with your eyes open. The trick for each hotel and brand is to determine in each market what pipes are flowing and what’s available. It’s optimal to cherry-pick which bookings are available at the highest possible profit margin. That’s the challenge everyone has.”

Crossroads at the Campground

It’s no secret OTAs have their sights set on adding campgrounds to their inventory, which has campground owners wondering if they should board the OTA train or let it leave the station.

“What’s going to happen in the campground space?” asked Heath Padgett, author, podcaster, and founder of The RV Entrepreneur Summit. “Is it going to be marketplace driven? Is it going to be OTA driven? Is it going to be a smattering of all the above? Where do you think campgrounds will have a comfort level around fee structure?”

This early in the game, no one knows the answers to those questions. Yet it seems campground owners have a unique opportunity to learn from hotels and their struggles so they can make informed decisions about embracing OTAs or prioritizing direct bookings.

Being that 76% of campground owners currently do not integrate with OTAs, it seems nurturing direct connections while creating strong bonds with customers is still the focus in the camping industry. 

At CampLife, we hope it always will be. And we are here to support you as you foster those relationships. 

Since 2006, we’ve been providing campground owners with the tools and resources they need to thrive. CampLife empowers campground owners to manage their online presence, streamline reservations, and engage directly with customers—and our suite of tools continues to grow.

So if you’re hesitant to invite OTAs into your park, we get it. You’re not alone. We invite you to explore CampLife’s comprehensive features to discover how our platform can support your business so you can chart your own course and focus on what matters most—connecting with guests and creating experiences they can’t wait to repeat.

To learn about CampLife, see a full list of features, and schedule a demo, visit software.camplife.com.

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