Building an OTA Software: business model and key features

Reading Time: 7 minutes

Building an OTA software may seem a concern for the upcoming players on the Travel market or for those who want to scale their business. One of the main reasons for that is the solidly established names of such giants as Booking, Airbnb, Expedia, and Kayak. Is it even possible to find a place for a brand-new travel agency in this competitive market? If the answer is yes, then what steps to follow to create a unique product? Let’s figure it out. 

You also may be interested in: Introducing a New Product In The Technology Market – How Not To Get Into The Trap of Losing Products

building an ota software

To begin with 

In general, Online Travel Agencies (OTA) are marketplaces, connecting travelers and such service providers as hotels, guides, transfer companies, and hotels. Service providers are interested in extending sales channels and the OTA choice appears to be beneficial for them. OTAs bring value to both: service providers and travelers, by contributing to smooth trip planning and offering the whole package of services on the all-in-one platform. Online booking on these platforms has made traveling agendas personalized as well as much clearer and quicker. The OTA software makes it easy to choose the best option in advance so when a traveler arrives, everything is ready. 

OTA Grouping 

When planning on your OTA, it’s worth considering the actual filtering of those, that may help you to define the group you want your OTA to belong to and emphasize the uniqueness of your future platform. OTAs can be grouped either geographically or by the scope of services. 

Geographic classification

  • global (Airbnb, since it isn’t restricted by the choice of the destination)
  • destination-specific (Vegas.com, since it offers trips to a single place and only)

Service-based classification

  • all-in-one (Expedia, since it offers not only accommodations, but also cars, cruises, flights, car rentals, and even more)
  • niche-specific (seniorliving.com, since it serves the needs of a specific audience)

On account that 72% of new customers read reviews before booking, almost all OTAs offer additional services, like reviews or travel guides. That helps them create the trust of the travelers and, as a result, get a loyal audience and increase sales. 

Distribution ways

When it comes to the distribution chain on the OTAs, here go two the most popular ways: channel management system and API. Hotels and property managers can distribute their inventory through the channel manager. It allows the automated synchronization of the room or property details, its updates, and provides you with a variety of potential integrated hotels, once your OTA is integrated with the Channel Management System. Though it seems to be a reliable way of distribution, the channel has its drawbacks as well. As a rule, the channel takes a commission that is paid either by the hotel or by the traveler. That is what makes the final price on the OTA platform not so appealing. 

channel manager distribution for ota

The second option available for OTAs – is API. This tool may be developed and initiated both by the OTA platform and Property Management System (PMS). The decision depends on the size of OTA. The platform can have its own API or connect to the one of PMS. Let’s switch our attention from hoteliers to property managers, as for the example. As our experience demonstrates, property managers are not likely to connect through API, they prefer to store their properties in PMS. Consequently, the API should come along with PMS and the OTA, as well. 

api development for pms and ota

The role of API for a travel application

To remain competitive, travel industry companies need to take advantage of APIs since if they are implemented and managed effectively, you get a chance to become one of the key players in the industry. It’s important to be fully aware of your IT infrastructure, and this is where IT partners can be valuable. Once you have the details about the data storage (that can be stored in a CRM, Enterprise Resource Planning (ERP), or a cloud-based software), you’ll be able to get an API designed specifically for your business needs. 

OTA main capabilities

Typically, the main user roles on OTA include property manager or hotel and traveler. For each of these users, there should be a set of certain capabilities in the platform. 

Hotel/ Property Manager should be able to:

  • create and manage the account
  • manage the number of rooms, availability, and rates
  • observe stages of booking of the exact property (whether it was confirmed or already paid)
  • see the transaction details
  • generate reports and get them in the printing format

A traveler should be able to:

  • create and manage the account
  • filter the rooms and properties by price, location, dates, availability
  • book rooms and properties
  • pay on the platform
  • modify and cancel a booking

OTA: technological aspects

To allow all the above-mentioned capabilities to be smoothly integrated and performed by the users, OTA should consist of the following elements: 

  1. Booking engine. Except for its main function – direct bookings on the website, a booking engine can serve as a tool for verification of the availability, reservations, payments, and even provide email confirmations. It’s important for booking engines to be cloud-based, to have multi-language support, to have a customizable layout, and provide secure online payments.
  2. Maps integration. By linking the maps to your website, you provide another value for the users. They will be able to see the location of the hotel or accommodation on the same page they’re planning to book.
  3. Property details page. It is necessary for the guest to make up their mind about booking a specific property. This page would allow the users to see the photos, availability, booking rules, and more on a separate page. 
  4. Filtered search tool. To help visitors easily find accommodations, it’s vital to develop a customizable search on your website. The wider the search filter you offer, the sooner your visitors will find the property they need. Among the most decisive filters are: search by location, destination, amenities, points of interest, number of guests, dates.
  5. Payment System Integration. By integrating payment solutions on your website, you not only extend the time users spend on your website, but you also provide accommodation distributors with effortless secure payments and easier financial management. 

Advanced capabilities

Apart from the basic functionalities, that we described above, there are additional ones that will promote your chances to become one of the top OTAs:

  • Insurance. The users may be dissatisfied with the service they get. The possibility of insurance would make them feel safer about their traveling agenda and compel them to use your OTA.
  • Promotions, special offers management. The possibility of managing promotions and deals with different conditions, such as seasonal, short-term, or long-term, regional promotions, will make the property managers and hoteliers, as well as travelers more loyal to your service. 

What’s important is that you do not limit yourself to these advanced features described above. If you have an exceptional idea that will promote bringing more value to the users, discuss it with the advanced software development team, that has expertise in developing solutions for the travel industry. As you are all set up with the idea, it’s time to work on the development strategy definition.

Development strategy for Online Travel Agency

To ensure an efficient development process, that entails a transparent and smooth communication process with the development team, it’s worth considering the following approach:

  1. Idea analysis. The accurate process starts with the gathering of all the information regarding your project, provision of the recommendations, ways of implementation. That is usually done by a Business Analyst.
  2. Solution identification. The next step is the determining services and technologies, based on the conducted analysis.
  3. Planning and documentation. The following actions include the development of the project plan, communication strategies, and the creation of the documentation.
  4. Development process. This is where the developers put your ideas into a perfect code, following the initial documentation and requirements.
  5. Quality assurance. Conduction of the testing activities to ensure smooth and continuous work of the system
  6. Deployment and launch. The final stage, where all the features set up, testings conducted, and seamless operation of the project provided.

We, at ASD team, stick to such a development process that influences the successful and fast realization of our client’s ideas. By offering full technology responsibility for the project, we guarantee the expert software development of bespoke solutions for the Travel & Hospitality industry.