OTA growth no longer mirrors travel demand

Strong earnings reflect share capture and platform leverage, not a broad consumer spending rebound

OTAs reported double-digit gross bookings growth in the latest earnings cycle even as consumer travel spending declined. Credit-card data shows little correlation between overall travel spending and OTA performance over the past three years, confirming that OTA growth is increasingly decoupled from underlying demand trends. Instead of signaling a market-wide recovery, recent results point to share gains, B2B expansion, marketing efficiency, and monetization mechanics. The industry may need a new framework to interpret OTA results more accurately.

Key takeaways

• Decorrelation confirmed: Credit-card data shows near-zero correlation between consumer travel spending and OTA gross bookings, indicating that OTA performance is no longer a reliable proxy for demand.
• Strong growth despite soft spending: Booking Holdings, Airbnb, and Expedia posted double-digit or high single-digit gross bookings growth while overall travel spending declined year over year.
• Execution over demand: Management commentary emphasized marketing efficiency, product improvements, and share gains rather than a surge in underlying travel demand.
• B2B momentum driving results: Expedia’s B2B segment significantly outpaced its consumer-facing business, highlighting OTAs’ growing role as enterprise distribution infrastructure.
• Wallet share compression: Travel’s share of consumer spending has declined, even as booking volumes remain resilient, suggesting lower spend per trip and shifting consumer priorities.
• Platform performance versus market health: Strong OTA earnings increasingly reflect distribution leverage, promotional funding, and loyalty penetration rather than overall travel demand growth.
• Implications for future distribution: As booking interfaces evolve, including AI-driven channels, OTA growth built on share capture and arbitrage may face new competitive pressures.

Source: Skift

Enjoying this analysis? Hospitality.today delivers daily insights on hotel distribution, AI trends, and travel commerce — straight to your inbox. Subscribe for free at Hospitality.today →