The Risks of Setting up Your Agency as an OTA | TravelResearchOnline

getaway-potato

The Risks of Setting up Your Agency as an OTA

For this week’s Independent Consultant, Mary offers insight to a reader inquiring about building their own travel site.

Hello, my name is Devon and I would just like to start by saying that I love your website. It has the most comprehensive articles to answer almost all of my questions regarding the travel industry! I have spent hours reading your various articles and already feel like I am way more knowledgeable about the travel industry than I ever would have been by simply scouring Google.

I am an avid traveler myself and have traveled all over the world but only recently considered it as an actual potential career. Most of my knowledge of the travel industry has mostly just come from the perspective of a traveler and I quickly realized how little I actually know about the industry as a whole.

I have what I believe to be a great idea for an online travel business, but frankly am not entirely sure which direction to go in. I am trying to build my own online travel agency similar to a Kayak or Expedia. I have expertise in web development but I do not know where I can access all of the APIs to build a directory of airlines, hotels, cruises, etc. for people to search for. I know that I will probably need to have access to a GDS but I am not sure how to go about that. Would I still go through a host agency? Will they even give me access to a GDS? Where do I even begin, aside from the web development, to build something like Kayak or Expedia?

I know this was quite a long-winded question but I hope you could just give me a few tips to point me in the right direction. Thank you very much!

Devon

Hey Devon!

Thanks for the kind words about the Host Agency Reviews site! I’m glad it’s been a helpful resource for you!

When it comes to setting up an OTA through a host agency, I’m afraid I don’t have great news for you. But perhaps I can shed some light on why going through a host agency may present a challenge for you.

What you’re looking to do is pretty hard since OTAs and hosts typically don’t mix. It’s not because hosts don’t want to embrace online technologies, it’s just that OTAs are risky, and in the end, the host has to foot the bill if an OTA runs a bad ticket or screws up and gets debit memos.

You can read about the latest data on debit memos here.

OTAs open themselves to a lot more risk because the booking process is automated and it takes pretty sophisticated algorithms and an active support team to make sure they’re keeping up with fraudsters who are trying to beat the system. The amount of money airlines/OTAs spend on their fraud prevention department is exorbitant and not something most startups can really afford. Nor can a host agency.

I’m not aware of any hosts that will take on an OTA for one of their agencies because of the risk mentioned above. It doesn’t hurt to chat with hosts, but this kind of OTA/host relationship, to my knowledge, is unprecedented. So if you’re wanting the GDS access, unfortunately, you may likely have to get your own ARC/IATA accreditation as hosts aren’t keen on opening themselves up to potential fraud.

You might want to try reaching out to places like Tnooz, Skift, or PhoCusWright to see if they have any suggestions as they’re more OTA-focused.

Wish I could help more!

Mary


Mary Stein joined Host Agency Reviews in 2016 as its editor. She’s passionate about supporting aspiring travel agents to turn their dreams into their livelihood.
A writer by trade, she can be found working on her novel and teaching creative writing workshops when she’s not tooling around on Host Agency Reviews writing articles and newsletters.
She has received awards for her writing from the Minnesota State Arts Board, the Jerome Foundation and the Loft Literary Center. She lives in Minneapolis, and loves hiking, camping, and traveling (of course!).

Share your thoughts on “The Risks of Setting up Your Agency as an OTA”

You must be logged in to post a comment.







Follow me on Blogarama BlogrollCenter.Com