Smaller Online Travel Agents (OTA’s) taking traffic share away from the big seven…

October 29, 2009 | Online Travel

U.S. online travel agencies (OTAs) have lost share of online bookings to suppliers over the past few years. However, data from PhoCusWright’s Online Traffic and Conversion Report shows OTAs still represent the largest category of online travel as measured by monthly unique visitors. According to the study, conducted in partnership with Compete, OTAs reached just under 50 million visitors in June 2009—placing them well ahead of airlines, the next largest travel category

One of the most notable trends in online travel is the decline of traffic to the top seven online travel agencies (OTAs): Expedia, Hotels.com, Orbitz, Cheaptickets, Travelocity, Priceline and Hotwire.

The top seven’s long-held market dominance in the U.S. effectively serves as a barrier to entry for startups. However, many companies have dared to scale the walls. Specialist and regional OTAs have led the way for the Long Tail of OTAs to carve a sizable niche for themselves—one that appears to be growing. The percentage of OTA visitors that hits at least one of the top seven brands is slowly decreasing, showing a particular dip in 4Q2008. The percentage of OTA visitors that visits one of the top seven OTAs has decreased from 79% in 2Q2007 to 72% in 2Q2009, indicating a growth in the popularity of smaller players.

The growing popularity of specialized OTAs corresponds to an overall consumer demand for targeted service delivery. Web sites that deliver the most relevant travel offerings to match a traveler’s needs are succeeding in a landscape full of choices. While the small players will not overthrow the current OTA oligarchy any time soon, they are managing to expand their corner of the market, even in today’s hypercompetitive environment.