The online travel market is expected to grow 18% in 2022 to $ 76.7 billion, a figure just shy of 2019 gross bookings, new research from Phocuswright reveals.
According to the US Online Travel Agency Market Report 2021-2025, OTA gross bookings are on track to surpass pre-pandemic levels in 2023, though international travel will continue to recover slower than domestic.
For 2021, OTAs delivered $ 65.2 in gross bookings, reaching 82% of pre-pandemic levels. Overall, OTAs accounted for 24% of gross bookings in the United States in 2021, up from a 20% share in 2020.
Phocuswright’s research reveals that for the US core OTA business (excluding Vrbo and Egencia), Expedia and Booking collectively accounted for roughly 93% of the OTA leisure and unmanaged travel business market in 2021.
Globally, Expedia reported gross bookings of 67% and Booking 79% compared to 2019 levels. Compared to 2020, Expedia nearly doubled its global gross bookings in 2021, while Booking more than doubled its 2020 figure.
Elsewhere, smaller OTAs including CheapOair, Hopper and HotelTonight collectively rose 60% in 2021 from 2020.
OTA vs. supplier-direct
In 2021, OTAs regained share of the total online market, rising from 35% to 37%. However, supplier websites maintained their majority stake in the US online travel market, with a 63% share of online gross bookings.
The hotel segment remains the only one where OTAs continue to outrun supplier websites, though not by much. In 2021, OTAs accounted for 52% of the hotel online market, but share is expected to decline to 48% in 2025.
For air and car rentals, though supplier websites are the preferred booking channel, OTAs gained share in both segments, with online air gross bookings capturing 20% in 2021 compared to 19% in 2020, and car rentals at 35%, up from 32% in 2020.
According to Phocuswright, mobile has been a pandemic-era winner, promoting safer and seamless travel, and OTAs are paying more attention to their apps.
In 2021, the majority of Booking’s mobile room nights transacted through its app, while competitor Expedia has expressed its intentions of becoming an app-first company.
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Beyond one-time booking interactions, OTAs are viewing apps as a way to foster customer retention and ongoing engagement.
More than half (51%) of OTA gross bookings were transacted via mobile in 2021, 10% more than pre-pandemic mobile share.
“Mobile will continue to gain share in the years to come as OTAs enhance and invest in their mobile product, though at a slower rate than at the pandemic’s onset,” the Phocuswright report states.
“As travel normalizes, desktop will recapture some share lost to mobile since the customer and product mix will be better aligned to desktop bookings (eg, more international travel, longer trips and air travel).”
For additional insights on the OTA market, download the full study here.