travel agent vs expedia

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The Pros and Cons of Booking Through Online Travel Agencies

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You’re likely already familiar with online travel agencies, even if you don’t travel often. These companies — such as Priceline , Expedia and Orbitz — act as intermediaries between you and a travel provider.

Booking your travel through an OTA can be a good idea in some circumstances, but you’ll want to be wary of its pitfalls. Let’s take a look at the pros and cons of online travel agencies, so you’ll know what to use to book your next vacation.

Pros of booking through online travel agencies

There are certainly advantages booking through online travel agencies, though you’ll find different experiences whether you’re using public OTAs — such as Kayak — or private ones like those offered by your card issuer, such as the Chase's travel portal .

✅ It may be cheaper

When searching for flights online, you may see different prices for the same routes that vary across websites. Although it may be a result of fare type — for example, some search results may not clarify that a fare is basic economy rather than main cabin or economy — other times, the difference comes down to competition for your business.

Online travel services will often offer slightly lower prices on flights in an effort to entice you as a customer. This is true for both hotels and airlines.

» Learn more: Best credit cards for online travel-booking websites

✅ It can earn you more rewards

Have you ever heard of shopping portals ? By logging into a shopping portal, you can earn rewards for purchases made with many online merchants. Some hotel chains, such as Hilton , Marriott and IHG , can be accessed through shopping portals while still booking directly on the hotel website. In this way, you can earn rewards with the hotel directly as well as with the shopping portal.

The same isn’t true for shopping portals and most airline sites. However, many public online travel agencies are accessible through shopping portals, which can then earn you rewards for airfare bookings. By opting to book in this way, you’ll be able to earn points or cash-back rewards through the shopping portal that you’d otherwise miss.

Some card issuers will also reward you heavily when using their online travel services. Clear examples of this can be seen with Capital One and Chase. With the Capital One Venture X Rewards Credit Card , for example, you’ll get 10 miles per dollar spent on hotels and rental cars booked through Capital One Travel .

The Chase Sapphire Reserve® is similar. With this card, you can get 10 Ultimate Rewards® points per dollar spent on hotels and rental cars booked through Chase's portal.

While these numbers are high, it’s important to remember that there are trade-offs when booking through an OTA rather than directly with a hotel or airline. We’ll get into that a little later.

Online travel agencies offered by your card issuer may not feature the same prices as booking directly; you’ll want to compare these before committing to a purchase.

Some card issuers will go so far as to give your points more value when redeeming through their online travel agencies.

This is true with the Chase Sapphire Preferred® Card . When redeeming points on Chase's travel portal, you’ll get 1.25 cents in value per point rather than 1 cent elsewhere.

» Learn more: How much are your airline miles and hotel points worth this year?

Cons of booking through online travel agencies

There are several downsides when it comes to using online travel services for booking travel. It mainly comes down to the fact that travel providers prefer that you book directly with them — and offer more perks to woo your business.

❌ It can be harder to change a booking

Ever needed to change a flight after it's booked? No matter the reason, attempting to alter or otherwise cancel a flight can be a hassle — especially if you’ve booked through a third party.

Generally speaking, rather than offering you direct assistance, both hotels and airlines will recommend you contact the online travel agency you’ve booked with in order to make any changes.

While you may be able to make changes or get refunds with the travel agency, airlines and hotels can — and will — offer much more flexibility when you’ve booked with them directly. You may also be subject to additional fees charged by the online travel agency, which can erase any savings you’ve received.

❌ You may not receive elite benefits

This is the real kicker for anyone wanting elite status. Although airlines will almost always recognize your elite status and allow you to earn miles even for bookings made through an online travel agency, hotels and rental car companies will not.

This is especially important for hotel chains. Earning elite status with hotels generally relies on elite night credits. Although these can be earned in a variety of ways — including having complimentary status by holding certain credit cards — the main method of acquiring elite night credits is by spending nights in hotels. Rooms booked through an online travel agency do not count toward elite status as elite night credits.

Additionally, you will not receive any of the benefits of your existing elite status if your booking is through a third party. This can mean the loss of perks such as room upgrades, complimentary breakfast and even free Wi-Fi.

» Learn more: The best airline and hotel rewards loyalty programs this year

❌ It may be more expensive

Did you know that many hotel chains have best price guarantees? Hyatt, Hilton, Marriott and IHG all have a guarantee that’ll give you either points or a discount if you find a better rate elsewhere.

These guarantees are generous; Hilton, for example, will match the rate and then discount it by a further 25%.

Although you’ll need to file claims for these guarantees and they face limitations — such as a 24-hour window from when you made the booking — you can save a lot of money on your stay if your request is approved.

Online travel agencies can be hit or miss

There are two sides to every coin and this is no different, as there are several benefits and limitations of online travel services. Depending on your needs and loyalty program status, you’ll want to choose whether to book directly with a travel provider or rely on OTAs to do the job for you.

Booking travel through credit card portals from issuers like Chase and Capital One can earn you big rewards. But if you anticipate altering your travel plans or aim to earn elite status instead, booking directly is the way to go.

How to maximize your rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2024 , including those best for:

Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card

No annual fee: Bank of America® Travel Rewards credit card

Flat-rate travel rewards: Capital One Venture Rewards Credit Card

Bonus travel rewards and high-end perks: Chase Sapphire Reserve®

Luxury perks: The Platinum Card® from American Express

Business travelers: Ink Business Preferred® Credit Card

on Chase's website

1x-5x 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases.

60,000 Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 when you redeem through Chase Travel℠.

1.5%-6.5% Enjoy 6.5% cash back on travel purchased through Chase Travel; 4.5% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 3% on all other purchases (on up to $20,000 spent in the first year). After your first year or $20,000 spent, enjoy 5% cash back on travel purchased through Chase Travel, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and unlimited 1.5% cash back on all other purchases.

$300 Earn an additional 1.5% cash back on everything you buy (on up to $20,000 spent in the first year) - worth up to $300 cash back!

on Capital One's website

2x-5x Earn unlimited 2X miles on every purchase, every day. Earn 5X miles on hotels and rental cars booked through Capital One Travel, where you'll get Capital One's best prices on thousands of trip options.

75,000 Enjoy a one-time bonus of 75,000 miles once you spend $4,000 on purchases within 3 months from account opening, equal to $750 in travel.

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Breaking Down the Pros and Cons of Using a Travel Agent

You're convinced that having a travel expert by your side will be useful. But how do you go about knowing when and how to book with them?

Heading out the door? Read this article on the Outside app available now on iOS devices for members! >","name":"in-content-cta","type":"link"}}'>Download the app .

Confession: I’m a big fan of travel agents (whoops, sorry, travel advisers ), even though I could technically book all my trips through websites and apps. And despite the fact that many of us might consider this industry old-fashioned and out-of-date, research shows that travelers, and millennials in particular, are once again turning to these specialists to help plow through TripAdvisor detritus. If you’re wondering: how much does a travel agent cost, and why would I book with one anyway? Read on.

How to Know If You Need a Travel Agent

Once you’ve come around to the idea of hiring a travel agent, ask these three questions before booking:

• Is this a domestic trip or one that involves traveling to a part of the world you’ve never been? If it’s the former you don’t need a travel agent.
• Can I get a better deal by using a travel agent? (This question requires you pricing out your trip with and without one.)
• Is this a big-budget, special-event kind of trip? If the answer is yes, go with a travel agent.

The Pros of Using a Travel Agent

They can find crazy deals..

This is literally their job. If they have been in the travel business for many years, they likely have supplier relationships in place that can help leverage better deals for you. Many travel agents specialize in locations (i.e., cruise vacations in Europe). Some travel agents offer package deals, with more savings passed on to you then booking the trip on your own—that is good news to your wallet.

They will be your advocate.

One of the best ways to utilize a travel agent is as an advocate should something derail on your trip. They can help you with lost luggage, in the case of natural disasters, if you get stuck in a location before your trip, etc. They are there to help you get your trip back on track.

They’ll take care of the little things.

I love my travel agent, and I love all the extras she provides when we use her services for a trip. For instance, when we traveled to the Bahamas, she made sure there was a nice bottle of champagne and strawberries in our room on our arrival, and she also upgraded our room free of charge. While this certainly is not a guarantee when you use a travel agent, there are a lot of added-value extras you can expect when you use a travel agent. Why? Because travel agents know you don’t have to use them to book your trip, and they want to say thank you.

They’re true experts.

Most travel agents have been working in the industry for years now, and it’s their job to stay on top of travel trends and upcoming hot destinations. When I spoke with my travel agent about a trip to Europe recently, she offered a few alternate destinations. I was not thinking about the destinations she suggested, but the alternatives offered great activities, culture, food, interesting boutique hotels, and more options for less money than my original destination.

They don’t usually cost extra.

It’s a myth that working with a travel agent will automatically cost you more; most get paid via commissions from the hotel or outfitter. Sure, some travel agents do charge a fee for putting together an itinerary, but most will credit you that fee if you end up booking the trip through them. Make sure you know all the potential fees before you use a travel agent, and do not hesitate to negotiate away.

The Cons of Using a Travel Agent

They’re not going to help with cheaper airfare..

Back in the day, you would use a travel agent to book every aspect of your trip. However, with so many options to find low-cost airfare, like Google Flights , Scott’s Cheap Flights , and  Skyscanner , booking your own flights is easy and cost-effective. Most travel agents cannot score discounted flights, and many travel agents will not even bother. Follow these tips on how to find the cheapest flights possible , instead.

They’re not you.

This may seem obvious, although it’s still important to consider. A travel agent not only finds you the best deals, but they also offer suggestions for activities, restaurants, and more. This is great if you’re someone who doesn’t like to research these things, but you run the risk of working with someone who doesn’t get your personal preferences (maybe they lean toward road tours rather than technical singletrack). Do your own research first, and come up with a list of activities that you want to do. Once you have that list, pass it along to your travel agent to see if they can rustle up any deals as they book.

How to Find a Great One

One of the best ways to find a reputable travel agent is to get referrals from your friends and family. Anyone that has used that travel agent for a previous trip and enjoyed their service is someone worth checking out. As with anything, I always suggest talking to at least two different travel agents to see who you feel most comfortable with. Remember, they are there to work for you.

Know your travel budget before you reach out to a travel agent. Likely, this will be the first question they ask you and will help steer them toward the best destinations for that budget. If you are traveling somewhere that’s specialized, like going on that once-in-a-lifetime African safari , find a specialist that knows that region inside and out. They will usually have the best deals and relationships with hotels and activity companies in that area.

How Much Does a Travel Agent Cost?

Usually, the cost of hiring a travel agent to organize a trip for you is fairly minimal. Many agencies charge a flat fee of around $100, and others may charge a certain small percentage of your trip. Most of their take-home profits come from the hotels, wholesalers, resorts, and businesses they work with, but be sure to as your travel agent about fees upfront and before you start working with them to plan your next dream vacation. (No one likes hidden fees and surprises.)

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Is a travel agent worth it the pros and cons.

Travel experts agree there are several advantages to hiring a vacation planner.

The Pros & Cons of Using a Travel Agent

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A travel agent can save you money and time.

Need to pivot your trip plans but don't want to deal with the extra time, money and hassle of rebooking flights and accommodations on your own? That's just one area where a knowledgeable travel agent (also commonly known as a travel advisor) can help. Read on to discover the other benefits – as well as the downsides – of using a travel agent, so you can confidently decide whether or not a travel agent is worth it for your next trip.

The Pros of Using a Travel Agent

Travel agents can save you money – and get you other perks.

"In some cases, you'll actually get a better  deal by working with a travel agent," says Jackie Steele, travel expert at MagicGuides . "This could be in the form of a cruise onboard credit (free spending money to use on the ship), access to special agency/group rates, or even just learning about a discount you qualify for but weren't aware of." The best agents will even keep an eye on new discounts as they're announced and apply them to your trip even after you've booked, he notes.

Travel agents handle all the details

Hotel room? Booked. Dinner reservations? Made. Tour tickets? Ready to go. A travel agent handles every detail of your vacation itinerary. "The traveler still gets to be involved in the fun part of dreaming up ideas and providing their travel wishes, while we take and perfect them," says Jessica Parker, founder of Trip Whisperer .

Molly McShea, owner and travel advisor at McShea Travel , points out that travel agents can also help with timing logistics. "Travel agents know how many days should be spent in each destination, which tours go together, and how many things you should do in a day," she says, adding that crafting an itinerary can be challenging if it's not something you regularly do. Additionally, travel agents can help you choose the best time to visit your preferred destination(s) based on seasonality and your budget, and sift through travel insurance policies to find the best option for your needs.

Travel agents can provide local expertise

"A travel advisor's industry connections and relationships provide added value to their clients," says Valerie Edman, a luxury travel advisor and agency owner at Cultured Travel LLC. She says when working with a travel agent, travelers gain access to a global network of connections including:

• In-destination specialists who work exclusively with travel advisors and can connect travelers with unique, off-the-beaten-path experiences they wouldn't otherwise know about
• Exclusive experiences not available to the general public

You'll avoid surprise fees

When deciding if a travel agent is worth it for you, remember this: A reputable agent can guarantee you won't encounter any surprise fees on accommodations and activities once your trip is booked.

You'll have someone to troubleshoot unexpected travel issues

A travel advisor is essentially your personal vacation concierge. "Because they've been around for so long, agents really know what to look for," says Christopher Elliott , a consumer advocate and journalist. "Travel agents are among the first to know about flight cancellations and delays , making it easy for them to rebook itineraries right away." 

The Cons of Using a Travel Agent

It might not be your cheapest option.

There are some instances when it makes more sense to plan your own trip. "If you're planning a quick flight from New York City to Los Angeles, it's easy enough to book it yourself online directly or through a third-party booking site," says Elliott. "If you're planning a once-in-a-lifetime trip or bucket list honeymoon , that's when you call the experts."

You'll have less flexibility in your itinerary

The upside of working with a travel agent is having someone plan an epic vacation for you based on industry knowledge and local expertise. But this can also be a downside in the event you discover an activity you'd like to do or a restaurant you'd like to try that isn't on your pre-planned itinerary. If you alter your plans, you risk losing money; plus, the time it takes for you and your travel agent to coordinate your change of plans may not be worth the hassle.

You still have to do some research

It's important to find an agent you can trust, which means you still have to do some of the vacation planning. For this part, Parker recommends picking up the phone. "Lots of people avoid or don't pick up the phone as much anymore," she says. "That's where you get the high-touch service, tone of voice, excitement or concerns to manage." She advises to look for the following red flags:

• No fees: " Travel advisors are charging planning fees more now or increasing them, so the client knows more confidently than ever, we work for them, not the suppliers with the best commissions," Parker explains. "There are a lot of things that are non-commissionable and the advisor's time and expertise shouldn't be given away for free, either. That's the best way to show an advisor takes their business seriously."
• Limited options: If you work with someone who is inexperienced or has an incentive to book you with a certain supplier, they may not be prioritizing your best interests. "It's important to check if they are with a larger consortia, accreditations and network, typically listed on their website and signatures," says Parker. "That level of mindshare doesn't come with a lone advisor unless they have many, many years of experience."
• Slow response times: If communication is delayed, that's a sign they may be too busy to plan your trip – but again, this is something you can avoid by having the right conversations early on.

Edman suggestes starting your search with the American Society of Travel Advisors . "ASTA-verified travel advisors are committed to the highest industry standards and have verifiable industry knowledge so consumers can feel confident in working with them," she says.

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We compared 7 travel-booking sites to show you what each is best at

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Planning a vacation or trip is undoubtedly stressful. You're bombarded with seemingly endless options for flights, lodging, and things to do, and it can be difficult to figure out where to start. Many travel aggregators strive to present you with the best deals, but they all end up looking very similar to each other.

These similarities make it easy to know what to do and expect when you first visit a site. Typically, you enter your destinations, dates, and number of travelers. After you click search, you can further filter based on price range, airlines, and departure times for flights; amenities, hotel stars, and location for hotels; and type of car and rental car company for cars. 

So what makes one site better than another?

It all depends on your priorities and preferences. Everyone travels and plans for that travel differently. Here are seven travel sites and the factors you should consider when choosing a site. 

Booking.com

Booking.com is a huge bank of information, offering more than 1 million properties in 117,000 destinations in 225 countries and territories. Wherever you'd like to go, you'll find it through this site. It offers booking for flights,  hotels, vacation rentals, and rental cars.  Clicking  restaurants will take you to OpenTable. 

Highlights:

I found their desktop homepage to be cluttered and a lot to look at compared to the homepages of other sites, but their app experience was noticeably simpler, which makes sense as travelers increasingly turn mobile. 

One feature on the homepage that stood out to me (shown above) was the "Are you traveling for work?" option. Clicking "Yes" will present popular business travel options like WiFi and breakfast.

Another feature was its flexible date suggestions if your chosen destination is a popular choice and accommodations are more than 50% reserved during your selected dates.

Best for: 

• Wide variety of options, including hostels, homestays, and bed and breakfasts
• Easy access to your plans and searches by syncing your account across your devices 
• Getting the best deals with their Price Match offer 
• Destination travel guides and articles 

Lacking or not the best for:

• Bundling hotel, flight, and car packages

Book a trip with Booking.com

Expedia offers booking for  flights, hotels, vacation rentals, rental cars, cruises, and things to do. 

You can bundle flight, hotel, and car deals so you don't have to go through the headache of looking separately and trying to coordinate all the deals. 

The "My Trips" section is helpful for managing your entire itinerary in one place, so you don't have to search through endless emails and accounts to figure out your vacation plan. 

If you sign up as a member, you can earn Expedia+ points to use toward future trips. Use the mobile app to earn 2x Expedia+ points. 

Like Booking.com, Expedia also offers suggestions for date shifts, date extensions, and route changes to get you to the cheapest deal. 

• Hotel, flight, and car bundles 
• Coordinating your whole vacation itinerary 
• Reward points system
• Single bookings. The site is best utilized for its bundle packaging.

Book a trip with Expedia

Tripadvisor.

TripAdvisor offers booking for flights,  hotels, vacation rentals, restaurants, and things to do.

It's well-known for its user-generated reviews, so as you're booking, you get the added benefit of reading reviews all in the same place. While I'm partial to Yelp for food recommendations and believe it to be better for US destinations, TripAdvisor is much more widely used in the international community. 

TripAdvisor is the most experience-driven travel site. You are not just booking somewhere to live — you're signing up to experience and explore a destination. 

• Detailed filtering (e.g. style for hotels and distinctive features for vacation rentals) 
• Comparing deals across aggregators 
• Strong user-generated review community 
• Bundling hotel, flight, and car packages 

Book a trip with TripAdvisor  

CheapOair offers booking for  flights, hotels, and rental cars.  Clicking on its cruises  tab takes you to another site, Cheap Cruises.  

The "Travel by Interest" section offers special deals for senior , military , student , and last minute travel . The military and student discounts emphasize keeping costs low, while the senior discount focuses on senior friendly destinations at an affordable price. 

Whether you're coordinating a reunion, wedding, or corporate event, a Group Travel Request is a good option. You can work with an agent on your travel needs. 

• Specific travelers like senior citizens, military, students, and large groups
• Higher than usual service fees (e.g. $32 per night per room for hotel bookings)

Book a trip with CheapOair

Hotwire offers booking for  flights, hotels, and rental cars.

Hotwire gives you all the filters and options you need but maintains the balance of not giving you too much. It keeps its sections simple, so you don't need to worry about something you may be missing out on. 

Thanks to partnerships with other travel sites like Hotels.com and Expedia, Hotwire can offer extremely low prices. There is also a free 24-hour cancellation policy on most flights. 

• Focused searchers who do not want to be distracted or overwhelmed by too many options, things to do, and city guides. Destination guides and inspiration can be found on a separate blog page. 
• Travelers on a budget
• Travelers with very specific preferences like hotel brand or car brand

Book a trip with Hotwire

Travelocity.

Travelocity offers booking for  flights, hotels, vacation rentals, rental cars, cruises and things to do.  And no, you're not seeing double. Expedia owns Travelocity, which may explain why the two homepages look almost exactly the same. 

From what we can tell, the most noticeable difference is Travelocity's Roaming Gnome, which represents the inspiration and wanderlust of traveling. The "Inspiration" section contains interesting articles like "Best Foodie Finds in Airports Around the World" and themes like "Luxury" or "Romantic." Expedia's travel blog, on the other hand, is relegated to an easy-to-miss link near the bottom of the page. 

• All the benefits of Expedia but with a more exploratory inspiration angle 
•  Single bookings. The site is best utilized for its bundle packaging.

Book a trip with Travelocity

Priceline offers booking for  flights, hotels, rental cars, and cruises.  

The " Express Deals " option rewards flexible travelers with up to 60% savings on hotels. The site will give you the location and star rating, but not the name of the hotel. You can still choose the bed type for many of the options. 

Another way to save is the Name Your Own Price feature where you input the location, star rating, and price bid for a hotel. 

For car rentals, you can also Name Your Own Price and bid for a car. If you don't have big preferences on the car brand, you'll be able to find a car for a price less than the search listings give you. For example, I was able to get an economy car with unlimited mileage for $30 a day, while the general search yielded cars that were all at least $37 a day. 

The cruise section is clear and easy to navigate. The search option is similar to searching for flights, with more dropdown selections than other sites. This feature is ideal for travelers who know exactly what they want for their cruise experience, and are not merely shopping around. 

• Travelers with low hotel and car brand loyalty who want to find a great deal
• Having a more focused cruise search process 
• Travel inspiration or destination guides
• Low risk takers who like to know exactly what they're getting

Book a trip with Priceline

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Here's Why You Should Use A Travel Agent Instead Of Booking Online

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Travel agents make travel less stressful. When booking a vacation, destination wedding or honeymoon, the last thing a traveler should have to do is worry.

“It is a special memory in your lifetime that should only result in a pleasant experience all the way through. A travel agent is vital in planning these special memories as they take the worry off of you and let you focus solely on the exciting events to come and what you shall pack,” said Jamie Mussolini, founder and president of Beachfronts Travel LLC in Westchester, NY.

They save you money… Travel professionals have access to special discount codes and promotions through suppliers. They often can save an additional amount or provide clients with a dining or spa credit that wouldn’t be available when booking through an OTA.

…and time. In  a 2016 survey of more than 1,200 consumers,  nearly one-third spent in excess of four hours, over multiple days, planning their own vacations. Travel advisors create a custom itinerary, pulling together flights, transfers, accommodation, tours, visits, meals and exclusive visits based on your preferences—so you can spend your time on other things.

They don’t charge hidden fees. In a column for Business Insider , Avery Hartmans described her experience using the Hotels Tonight app for a staycation in New York City – and noted that the prices listed did not include taxes and fees. Hartmans said she was charged an additional $121 in fees for the weekend, an expense she wasn’t expecting; “the extra fees were a bad surprise, and they put us well over budget for the trip,” she said.

Many agents don’t charge fees at all, and those who do are up-front about the cost.

They advocate on your behalf. A Washington state family, as TMR previously reported, received an email a few weeks before its $874 vacation was cancelled due to overbooking. After hours on the phone, Holly Parsons walked away with $500 in Expedia vouchers and three nights in a Holiday Inn Express.

“I feel for this family that has suffered a horrendous experience not only were they left with no refund but also a cancelled trip,” Mussolini said. That would never have happened if they used a travel agent. “Using one of those websites is taking a risk and can be a setup for a disaster. During peak seasons to find out your trip is cancelled and have no refund is the worst news – but on top of that, trying to scramble to plan something at the last minute is even worse.”

They provide personalized attention. OTAs provide a one-size-fits-all service, not taking into account the numerous variables that are in play. Travel advisors tailor their services to their clients’ individual needs. Have concerns? They’ll talk you through them. Need a hotel that can cater to your allergies? A travel advisor can speak to hotel managers to make sure it’s taken care of.

“Despite all the websites, clients by the truckload are desperate for a real human voice on the phone. They are clamoring for truly dedicated, genuine customer service and someone willing and eager to sell them what they want,” said Norm Payne, senior consultant at Uniglobe Premiere Travel. “People readily buy from those ready to sell. Really taking care of your clients automatically takes care of your profit margins.”

They offer insurance. From guaranteeing your hotel is available to knowing if the excursion company is legitimate, booking through a travel agent ensures travelers will not get duped. And they provide insurance for medical emergencies and trip cancellations.

They’re there 24/7. Travel agents are on call 24 hours a day, seven days a week. They’re there with you throughout the booking process and follow up afterward. On the other hand, contacting an OTA’s customer service line often means wading through a chain of people. Parson said she spent six and a half hours over three days speaking with Expedia’s customer service department.

They’re specialists. Agents have a personal understanding of your interests and insight into a specific destinations and segments of travel, like LGBT or destination weddings. A good travel agent spends time getting to know the customer and so can make recommendations tailored to what you want to do.

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Are Travel Agents Still a Thing?

By Allison Williams March 18, 2022

Image: Gage Murrey and 2p2play / shutterstock.com

Like buggy drivers and LaserDisc player repairpeople, the travel agent profession sounds like it should be obsolete. After all, Expedia has been around so long it can legally order alcohol. Between Kayak and Google and TripAdvisor, is there still a place for human travel bookers? Absolutely, says Sheri Smith of Seattle's Elizabeth Holmes Travel (no, not that one ).

Smith has been at Elizabeth Holmes for almost 20 years, but in the business for more than a decade longer. The key to her success—to any travel agent's success in the age of point-and-click booking engines—is niche knowledge and upgraded services; the longtime Seattle agency specializes in European trips. The key: not picking a hotel or tour guide sight unseen, even in rural Italy or downtown Cairo.

"We've vetted them," she says of the in-country partners she uses. "We know that they're going to be financially sound, we have confidence of them taking care of our clients." But she notes that travel agents offer more than a quality standard in the pandemic age. Smith remembers a client traveling in the Middle East over Christmas 2021; on their final stop in Jordan, one child tested positive for Covid. Independent travelers would have been "put into the government Covid hotel, which is not ideal." Smith helped the local tour operator vouch for the family, allowing them to ride out their quarantine in their four-and-a-half star luxury hotel.

But even though getting Covid abroad remains relatively rare—Smith can think of only two clients from the whole agency who experienced it—the pandemic has wreaked havoc across the industry. Cancellation policies differ by airline, and even flyers on the exact same flight have varying ability to rebook depending on exactly how their ticket was issued. Smith can rattle off which codeshare partner will give the most flexibility in the case of, say, ballooning Covid surges. She even knows which of the two daily flights from Seattle to London is more likely to be cancelled by the airline.

Smith admits that she gets some surprised responses when she shares her profession: "We're here, there's still quite a few of us!" The American Society of Travel Advisors estimates almost 3,000 people in Washington alone work in the field, with agents processing 155 million trips nationwide in 2015. (The organization renamed from their original 1931 moniker, American Steamship and Tourist Agents Association, sometime after steamships ceased to represent the height of luxury.) Today agents are less likely to be paid a commission by an airline; mostly they include a service or planning fee with their work.

Still, the existence of agents doesn't mean that even Smith recommends them for every weekend jaunt. "Anyone can point and click for Vegas," she says. "I would almost always tell you to point and click for Vegas." International travel, she says, still comes with the kind of unknowns that her profession is uniquely positioned to handle. "Anybody can hang a shingle on the internet, and you can give anybody thousands of dollars. Do you know who you're giving it to?"

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clock This article was published more than  1 year ago

The great booking debate: Is direct better than a third-party site?

Travelers swear by both methods, but the best way may be to use a little of each.

Is it better to book your next trip directly with a travel company or turn to an online agency promising a good deal? As the popularity of online travel planning grows, the question can elicit strong opinions on either side.

Kathy Lopez, an author from Prescott, Ariz., prefers the direct approach, saying it allows her to cut out the middleman for her airline tickets. That means the carrier contacts her when there’s a schedule change. She says working with an intermediary can result in miscommunication — and even a missed flight.

For hotels, she finds that she’s treated like royalty with a direct booking. “I get perks of a top-tier member in loyalty programs, even if I’m not a top-tier loyalty program member,” Lopez says.

But other travelers feel differently. Mark Beales, a retired mortgage banker from Mill Creek, Wash., booked directly for years. But he recently had a problem with a car rental company in Ireland, which made him see the appeal of a third party.

“They wanted me to pay in dollars at a terrible exchange rate,” he recalls. “Appeals to the corporate office went nowhere.”

Beales wonders what would have happened if he had worked with an online travel agency that may have been able to negotiate a better deal for him. Would he have saved himself a lot of trouble by booking through Expedia or Booking.com?

Online travel agencies are in growth mode after a pandemic pause. According to the Business Research Company , the global online travel market is projected to grow from about $461 billion to about $972 billion between 2020 and 2025.

J.D. Power’s latest analysis suggests that travelers who book a hotel directly get slightly better customer service, with an overall satisfaction score of 838 out of a possible 1,000 points vs. 821, according to the company. They also get more bang for their buck, with an 808 in their “value for money score” for direct booking, compared with 793 points.

“Year after year, our research shows that guests who book directly with a hotel chain have a better overall experience,” says Andrea Stokes, who heads J.D. Power’s hospitality practice. It’s a sentiment broadly shared across other industry sectors, such as airlines and car rentals.

So why does direct booking have a small edge in customer satisfaction? That’s a question more travelers will be asking in the weeks ahead, as they plan spring break trips and start to consider summer vacation plans. To find out, you have to understand the differences between a direct and an online agency booking, and how travel companies will try to entice you to skip the middleman.

The great airplane debate: Should you ever switch seats?

What is a direct booking?

A direct booking means you’re making arrangements without the help of a travel agent or third-party booking company. You’re reserving airline tickets, hotel rooms or rental cars by contacting the business directly, which could be online, through its mobile app or by phone.

A direct booking can be significantly faster, because you don’t have to rely on a third party to complete it. Travel companies claim a direct booking is safer, because you only share your credit card information and other details with one party.

What is an agency or online booking?

A third-party booking means you’re letting someone else make the reservation on your behalf.

You work with a travel agency, adviser or — most common these days — automated platform, such as Expedia or Booking.com, to reserve your flight, hotel room or rental car. In the context of comparing a direct booking to a third-party booking, most people are referring to an online platform.

You asked: Do I need an international license to drive abroad?

What are the benefits of a direct booking?

Travel companies may offer incentives for customers to buy directly from them, including lower prices, extra loyalty points, special offers and other perks.

For example, at the Carlton Tel Aviv Hotel , guests who book directly can also get a taxi ride to the airport at no extra charge, a $40 value. If your direct booking is for more than three nights, the hotel will sometimes throw in a complimentary 45-minute massage and a room upgrade. “By means of a direct booking, we can build and nurture a strong relationship,” says Adi Uzan, the hotel’s sales and marketing director.

Guests at the Eastern Slope Inn in New Hampshire who book their reservation on the hotel’s website have access to the best rooms in the house, says Megan Scheid, the resort’s vice president of hospitality. “They also have access to last-room availability,” Scheid says. “We shut off the online travel agencies long before we sell out.” The Eastern Slope also offers a 10 percent discount on future bookings if guests buy directly with the hotel.

CitizenM, a hotel chain that caters to young companies and knowledge workers, offers discounts and perks through its free and paid membership programs. Special events for members include networking sessions or presentations from experts, such as a talk that CitizenM Miami Brickell will host with venture capital investor Jason Calacanis on Jan. 25.

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It’s not just hotels. At Seattle Ballooning , owner Eliav Cohen says he can take better care of his customers, because he can see all the details in their reservations and has direct contact with them.

“If guests use a third-party site, they typically have to go through them to make any changes, since they have different rules,” he says. “The process takes much longer, there are long hold times, and often ends up with frustrated guests.”

Cohen says that, in 2023, he plans to stop working with online travel agencies and accept only direct bookings.

Lastly, booking directly may help support a small business.

“Travelers may not know that third-party sites take up to 40 percent commission,” says Leanne Turner, chief operating officer of the hotel consulting company Alo Index . “Big hotel brands have the leverage to negotiate this percentage down, but independent hotels struggle to balance the wide distribution of a third-party booking site with losing nearly half the room revenue to commission.”

What are the benefits of booking online?

Should you stop using third-party websites to book flights, hotels and rental cars? Not necessarily.

Travel companies may treat you better when you book directly — of course they will if they’re saving a 40 percent commission — but there’s also a bigger picture.

Online agencies are an essential part of the travel ecosystem, because they allow easy price comparisons across a range of businesses. Some may also have access to deals you won’t find by booking directly.

So if you’re looking for a beachfront hotel in Tel Aviv, it’ll show you the Carlton — and the Savoy and the Dan — and it will let you compare prices. Without an online agency, you’d have to go to each hotel’s website and run a search, which might test your patience.

Online agencies have also upped their game with improved security, ensuring that your data is safe.

But the most significant benefit may be that, if something goes wrong, you’ll have a third party to help you fix your problem. (At the same time, the agency controls your booking, which may create its own challenges.)

“One of the most enduring and universal principles of hospitality is that guests should always be treated exactly the same, regardless of how they booked or who they are,” says Tim Hentschel, CEO of HotelPlanner , an online agency that specializes in group hotel bookings. “Of course, some guests have more unique needs and requests than others, such as celebrities or elected officials with entourages. But generally speaking, hotels should treat all guests equally, regardless of how they booked their stay.”

Even Lopez, the author who prefers direct bookings, says she sometimes uses an online agency.

“When I book an international trip, I use Booking.com, because I don’t stay in chain hotels,” she says, “so sometimes I need the power of an intermediary if I have an issue.”

She says Booking.com has helped her negotiate refunds on bad hotel stays that she booked abroad. Had she made the booking directly, she says, the hotel would probably have just ignored her.

Because online travel agencies have millions of customers, they can negotiate discounts that ordinary travelers can’t find on their own. And they can create dynamic packages — airline tickets, hotel rooms, car rentals — that can save you lots of money.

Take the online agency out of the equation, and everyone must pay retail, which is not good for customers.

Bottom line: It’s best to mix and match

The best strategy is to keep an open mind about booking. Run a price comparison on your favorite online travel agency. Then check if your airline, hotel or car rental agency can offer you a better deal by booking directly.

More spring travel tips

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Travel Agencies vs. Online Bookings

A nationally recognized reporter, writer, and consumer advocate, Ed Perkins focuses on how travelers can find the best deals and avoid scams.

He is the author of "Online Travel" (2000) and "Business Travel: When It's Your Money" (2004), the first step-by-step guide specifically written for small business and self-employed professional travelers. He was also the co-author of the annual "Best Travel Deals" series from Consumers Union.

Perkins' advice for business travelers is featured on MyBusinessTravel.com , a website devoted to helping small business and self-employed professional travelers find the best value for their travel dollars.

Perkins was founding editor of Consumer Reports Travel Letter, one of the country's most influential travel publications, from which he retired in 1998. He has also written for Business Traveller magazine (London).

Perkins' travel expertise has led to frequent television appearances, including ABC's "Good Morning America" and "This Week with David Brinkley," "The CBS Evening News with Dan Rather," CNN, and numerous local TV and radio stations.

Before editing Consumer Reports Travel Letter, Perkins spent 25 years in travel research and consulting with assignments ranging from national tourism development strategies to the design of computer-based tourism models.

Born in Evanston, Illinois, Perkins lives in Ashland, Oregon with his wife.

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Politicians, searching for everyday examples, often fall victim to the trap in the old adage, “It ain’t what you don’t know that hurts you, it’s what you do know that ain’t right.” A prominent politico (no name, I’m not into partisan politics, and it happens in both parties) did just that when he tried to illustrate dynamic change by asking, “When was the last time somebody went to a bank teller instead of using an ATM or used a travel agent instead of going online?” As I’m sure lots of folks responded, the answer to both questions is, “I’m doing it as you speak.” Bank tellers and travel agents are still around and still providing important services. Although I don’t have any great insights about retail banking, I know with some accuracy that travel agency business is doing OK these days.

Probably the first point is that “travel agency instead of online” is what my old debate coach used to call a “false dichotomy:” setting up a situation as “either-or” when the reality is “both.” Some of the biggest online travel sellers—Expedia, Orbitz, Travelocity, and such, are, in fact, travel agencies themselves, as are the many more specialized online travel sellers. The industry’s standard term for them is “online travel agencies,” or OTAs. And many travel agencies with local “bricks and mortar” retail offices operate their own websites.

But let’s assume that the politician really meant personal visits or calls to an in-person “retail” agent. Even this more limited reference doesn’t square with the facts. Lots of you prefer dealing personally with an agent to going online yourself, for several reasons:

• Agents can save you time. There’s a good chance that you’ll be reading this column online, and that you regularly make your travel arrangements online. You’ve found, then, that ferreting out your best deals often requires a lot of time—maybe many hours—for even a simple trip. That’s why some of you prefer one call to a travel agent who can do the ferreting out for you. This service is especially relevant if you’re extremely busy or place a very high value on your time.
• Agents provide skills you might not find online. Here, I’m not talking so much about personal airline and destination recommendations—you can get more of that online than you can possibly assimilate—but in such specialized areas as assembling custom tours or using airline ticketing tricks for multi-stop international trips that the OTA systems can’t incorporate.
• Agents can help solve problems. If your flight is canceled or you face some other problem, an agent can probably find a better solution, more quickly, than you could on your own.
• Agents provide special services to business travelers. Many businesses find the best way to manage their travel activities and budgets do that is to use a travel agency. Small businesses and individual professionals, especially, find business-oriented agencies to be helpful.

This is not to say that you should all shut down your computers and head for a travel agency. Online is still the best bet for many of you:

• Retail travel agent services are no longer “free.” Fees range from around $30 for a simple air booking to much more than that for a complicated itinerary.
• For a relatively simple itinerary, you can probably find on your own any good deal you could get through a retail agency.
• Retail agents often can’t or won’t use some of your best sources of big discounts, such as Hotwire, Priceline, by-owner vacation rental sites, and flash sale sites. One local agent I know won’t book flights on Allegiant because of difficulties when that line cancels a flight.

All in all, if you’re skilled, use good information sources, and have the time, you can probably pay less for any given trip than you’d pay through a retail agent. But if you’d rather let someone else go through the hassles—and help you fight a problem—a retail travel agent is nearby and glad to help.

(Editor’s Note: SmarterTravel is a member of the TripAdvisor Media Network, an operating company of Expedia, Inc. Expedia, Inc. also owns Hotwire.)

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What is the difference between booking with a travel agent and booking through Expedia?

Booking with an agent allows you to:

• Tell them what you are looking for in a vacation; the good bad and unknown; a good agent will steer you in the right direction, especially since they probably have first hand experience. Yes we all have access to Trip Advisor, however, in my opinion, I have a Trip Advisor Pro account; I am connected with hundreds of travel professionals around the world who are very candid about their experiences. In fact, in our office we have our own little Black Book, or list of resorts on a “Do Not Sell” list because we don’t want our clients to waste their hard earned money and precious vacation time on sub-par experiences.
• Secure the vacation with a small deposit and make payments like lay away. No, lay away didn’t go out in the 80s in fact, that’s one of the best ways to pay for your vacation! Instead of paying for it all at once leaving your credit card smoking, you can secure your trip with as little as $50/pp and pay as you go. As long as it’s paid off by the final payment, most agents don’t care if you have a payment plan set up or not.
• Get special extras without having to pay for them including hidden discounts. There really isn’t much that brings more joy to me after knowing my clients have had a great vacation except for when I am able to delight them with extras that they knew nothing about. Like a bottle of chilled sparkling wine awaiting their arrival in their suite or even a selection of handmade chocolates with a note to say “hope you are enjoying your trip” when they are halfway across the globe. The best is when I can say “thank you” for your loyalty and even service by offering discounts for returning guests or military personnel.
• Check in like a rockstar and not just a number since a good agent will have contacts in the resort setting you apart. There are not many worse words to hear after traveling all day than to hear, “We’re overbooked”. That commonly happens on the airplane and the hotel when people book online with some suppliers. When you trust your trip to an agent you can rest easy knowing your seat and pillow will be waiting for you. In addition, we like to alert the resort of our VIP clients (you) who are arriving so they too can be ready to greet you like the VIP you are.
• If the price drops so does your balance. If the price drops or a sale presents itself offering a better value than previously booked, we are able to rebook and pass the savings back to you. We are notified of the sales so you don’t have to watch for them. Once we had a sale that dropped the rooms by $500! That’s a lot of swimsuits, sundresses and strappy sandals at venus.com!
• If you have a problem, “yo I’ll solve it!” The world is an imperfect place, even in the most perfect looking destinations. Thankfully, if you should experience a problem, you are never left to your own devices to figure it out. You have access to a destination help line 24/7 in addition to me! So when the ocean view room overlooks the dumpster, or the pre arranged shuttle leaves without you or you realize your passport has expired and you are scheduled to leave in 24 hours, you can breath a sigh of relief knowing that you have an agent in your corner.

These are just a few of the reasons why you should consider having us book your next trip. I look forward to talking with you and booking your next dream vacation!

Here’s to your next Divine Destination!

Jennifer Maki

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Expedia and Booking in the Post-Pandemic Travel Landscape

Executive summary, travel industry context, booking vs. expedia recovery, booking’s u.s. expansion, web traffic trends, digital-native, marketing economies of scale, new technology and product offerings.

• Cross-Sector Offerings

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Report Overview

We check in on the current state of Expedia and Booking Holdings, the big two online travel agencies in the U.S. and Europe, as they recover from the COVID-19 pandemic.

In the short-term, Booking Holdings and Expedia Group are both recovering nicely from the depths of the COVID-19 pandemic. We look at how growth rates, regional strategies, and marketing efficiency are shaping up into year end.

We also take a long-term perspective on how the online travel business model is evolving and what changes Expedia and Booking are making in return. Expedia is focused on launching loyalty and B2B partnerships. Booking Holdings is investing in new tech, including apps and fintech, and in matching Expedia’s cross-sector offering.

What You'll Learn From This Report

• How Expedia and Booking’s Gross Bookings, Revenue, and Profits are recovering post-pandemic.
• Marketing efficiency for Expedia and Booking year-to-date including how web traffic is shifting and relative returns on investment.
• A look into the long-term dynamics that are redefining the online travel space.
• New initiatives that Expedia and Booking are investing in for 2023 and beyond.

We check in on the current state of Expedia Group and Booking Holdings, the big two online travel agencies in the U.S. and Europe, as they recover from the COVID-19 pandemic. 

In the short-term, Booking and Expedia are both recovering nicely from the depths of the COVID-19 pandemic. Booking is growing faster as Expedia’s airline exposure is a drag. Booking continues to make headway in the U.S. and saw notable progress during the pandemic though Expedia still holds the lead in North America. 

Sales and Marketing spend continues to be a major expense and we see little signs that performance marketing efficiency is improving post-pandemic. However, both have invested heavily in brand marketing, loyalty, and new product offerings to drive customer interest and are seeing these initiatives pay dividends in the form of direct or organic search traffic. 

We also take a long-term perspective on how the online travel business model is evolving and what changes Expedia and Booking are making in return. Expedia is focused on launching loyalty and B2B partnerships. Booking Holdings is investing in new tech, including apps and fintech, and in matching Expedia’s cross-sector offering. 

The travel industry is shifting and Expedia and Booking are revamping their strategies, but both remain formidable travel competitors. 

State of Recovery

Expedia Group and Booking Holdings as the big two online travel agencies in the U.S. and Europe are important bellwethers to understand how the online travel space is recovering from the COVID-19 pandemic. With third quarter 2022 earnings behind us, let’s check up on how these two businesses are performing.

In terms of revenue recovery, online travel stacked up nicely compared to other travel public companies. Airbnb is the superstar leaving all others behind. Hyatt, Choice Hotels, and Ryanair outperformed Booking Holdings to round out the top five. Expedia is slower to recover, but still is above similar 2019 levels of revenue and is outperforming European airlines like IAG Group and Lufthansa, which were plagued by airport backups this summer. The worst ranking are, unsurprisingly, the cruise companies.  

While we are comparing online travel agencies to other travel sectors, it is interesting to check in on customer satisfaction scores. The American Customer Satisfaction Index benchmarks how companies and sectors appeal to shoppers over time and relative to one another. Pre-pandemic, the online travel sector had higher satisfaction scores than the broader hotels or airline sector linked to value pricing, online convenience, and predictable experiences. 

However, the pandemic appears to have plunged booking sites into a customer service crisis, with scores falling by four percentage points from 79 in 2019 to 75 today. In contrast the overall score for all U.S. businesses only fell by three points to 73. And surprisingly, airline scores grew by one point. Today for the first time ever, customers report the same level of satisfaction using an airline as they do using an OTA. 

Online travel receives the lower satisfaction scores for their cancellation policies, promotions, and loyalty programs. We also think that a large part of the issue is that customers don’t trust online booking sites to deliver on complex itineraries when schedules break, as they so often have this summer and during the pandemic broadly.

On the plus side, OTA satisfaction was high with regards to mobile apps and ease of bookings. The ability to deliver a strong customer experience will become an increasingly important tool, in our mind, that booking sites will need to use to stand out from their competitors and peers. 

When looking at the big two in aggregate, we can see that the market for online travel gross bookings is reaching the point of full recovery. Together, Expedia Group and Booking Holdings drove $205 billion of gross bookings in the trailing twelve month period ended September 30, 2022. That puts the two just over their 2019 record of $204 billion gross bookings. 

However, this top-level trend masks important company differentials. Expedia Group and Booking Holdings historically grew gross bookings at a very similar pace. Each grew at a mid-teens level before the pandemic and both fell by ~60% in 2020. Yet the two have performed quite differently to date with Booking Holdings achieving gross bookings 17% greater than in 2019 while Expedia Group is still 15% below that year. 

We attribute this mainly to the different product mixes that each website offers. Booking.com’s inventory is almost entirely accommodations. Further bolstering Booking.com is that 30% of its room nights in Q3 ‘22 came from alternative accommodations – the hottest subsector in the entire travel industry (see Airbnb’s revenue recovery above). In contrast, Expedia has a larger mix of airline tickets in their bookings mix. Air was 6% of Expedia Group’s revenue in Q3 ‘2019 and that segment is still under heavy pressure. 

If we examine Expedia’s performance by segment we find that lodging revenue in Q3 2022 was 11% higher than in the same period in 2019, much closer to the performance that Booking Holdings is posting. But Air ticketing is not even half way back to equivalent 2019 levels. Advertising, primarily Trivago, is also holding back Expedia’s recovery. 

Let’s look at how other important financial measures stack up at Booking and Expedia in the third quarter of 2022 relative to 2019. 

As discussed, Booking Holdings gross bookings are growing while Expedia lags, largely due to the lodging vs air mix. Despite this Expedia’s revenue has been made fully whole, because Lodging carries a significantly higher commission. And so while the shift away from lodging has held back Expedia’s Gross Bookings recovery, the mix has benefited its overall take rate and led to a much smaller differential between Expedia and Bookings on the basis of revenue recovery.

Interestingly, when it comes to operating profit, Expedia is actually outpacing its 2019 earnings by 31% while Booking is up 9%. Booking is still running a higher overall operating margin than Expedia, 42.6% vs. 22.1%, but Expedia was able to generate more incremental operating leverage through expense cuts over the last three years. 

This trend of incremental operating leverage at Expedia while Booking retains an overall better margin, shows up clearly if we look at sales and marketing relative to revenue at each company. Sales and marketing is typically the single largest expense line item for an OTA and so examining it closely gives us a good understanding of overall margin. 

Over the trailing twelve months leading up to September 2022, Expedia spent 53% of the revenue it earned on sales & marketing. That’s high. More than the equivalent invested by Booking Holdings. But in September of 2019, the same common size S&M metric for Expedia was 54% and in even earlier years like 2017 and 2018 that ratio could be as high as 55%+. 

In contrast, Booking Holdings spent 47% of revenue on S&M in TTM Q3 ‘22, up from 43% in Q3 ‘19. Expedia saw a one point gain in S&M leverage while Booking experienced a four point decline – a net differential of 5 percentage points. These seem like small percentages but when multiplied by billions of revenue it adds up to major shifts in operating dollars. This explains why Expedia is at 131% of 2019 operating revenue while Booking is at 109% even as Booking saw a much faster recovery of Gross Bookings and a better overall operating margin. 

Common size sales and marketing dating back to 2008 shows a long-term trend of Expedia and Booking slowly converging towards parity on their marketing budgets but Booking still retains the overall edge.

Why is Booking stepping up its sales & marketing in relative terms faster than Expedia? One answer might be that Europe, Booking’s home base, has been slower to recover, thus creating a need for the company to invest in inorganic traffic to bolster sales. Another possibility is that Booking is investing heavily in expanding to the U.S. Booking has made clear it wants to expand even further into Expedia’s home turf but that won’t come fast or cheap. 

U.S. desktop traffic data from SimilarWeb suggests that booking.com is making headway against expedia.com. We started by aggregating average monthly U.S. desktop traffic volumes for each site by year. Benchmarked to a 2019 baseline booking.com’s traffic today is 35% higher than pre-pandemic while expedia.com grew by 26%.

To chart that more clearly, we directly compared traffic volumes between the two sites, from 2016 – 2018 expedia.com would regularly receive ~2x as much traffic as booking.com. That dominance fell to 1.7x traffic in 2019. Today expedia.com receives 1.6x more traffic than booking.com

This is a basic analysis and doesn’t include mobile traffic or other Expedia Group domains like hotels.com or Orbitz. However, the directional trend is clear to us that Booking is slowly gaining traffic share over its rival in the U.S. even as it remains quite clearly the second fiddle across the pond. 

SimilarWeb is also able to give us a sense of web traffic sources for expedia.com and booking.com in the U.S. which we use as a proxy for their parent company performance. 

Its data suggests that unpaid traffic, as a share of total U.S. desktop visits, has grown at both expedia.com and booking.com during the pandemic. Both seem to have reached a parity of ~75% unpaid traffic, a noticeable uptick from the 55-65% traffic share that was the norm pre-pandemic.

This is a positive development for both brands, but just because the traffic is not directly paid for doesn’t mean it has no cost. We combine both organic search engine results and direct brand.com web visits in this bucket. And although neither incur a direct advertising cost paid to Google or other metasearch sites, both can be influenced by brand marketing. 

We know that Expedia and Booking have both been leaning heavily into brand marketing on TV, online, and print to drive mindshare amongst consumers. This helps square the circle for us of how sales & marketing spend does not seem to have fallen dramatically even as unpaid traffic sources saw a 10+ ppt share gain. It seems to us that brand awareness marketing campaigns in the U.S. are having their intended effect of driving traffic and searches to these online travel brands without incurring the Google ‘tax.’

Long-Term Business Trend Updates

The travel industry has long been defined by a running series of channel wars between travel operators and their distribution partners. This balance of power is never static and swings back and forth between eras of relative advantages dating back to the start of the jet age.  

Suppliers tend to do best in stable, growing economic environments while distributors are often the first to capitalize on disruption – both economic and technological. Distributors tend to move faster on changes in the tech landscape, with online travel agencies, as an example, early to capitalize on the long-term consumer shift to ecommerce. And in moments of economic disruption, recessions tend to make suppliers more willing to pay with margin for the ‘heads in beds’ that third-party channels can deliver. 

We would argue that the pre-COVID period was an era of relative supplier strength as brands consolidated and launched book-direct campaigns based around loyalty. Our assumption heading into COVID was that, at a moment of extreme disruption for the travel industry, the pendulum would swing back in favor of third-party distributors.

But this initial assumption has not played out as expected. It is still very much up for debate whether the coming years will see a relative benefit for travel distributors. Brands are now skilled at online marketing. And long-tail platforms, like Google and soft-brand collections, are making it easier for suppliers to reach travelers without paying traditional commissions.  

With this historical framework in mind, let’s examine the state of Expedia Group and Booking Holdings, the two largest online travel agencies and how their strategies are evolving to compete in a post-COVID travel world. 

We believe Expedia and Booking have several sources of competitive advantage. Some of these sources of business edge are shrinking in the modern environment while new ones are being developed via growth experiments. 

• Digital-Native // Status: The edge gained by being a digital-native business is shrinking as ecommerce becomes the norm.
• Discounting // Status: shrinking as operators drive enforcement of rate parity and incentivize direct booking.
• Wide Selection of Inventory // Status: growing as inventory continues to expand and as economic slowdown likely drives operator discounts.
• Marketing Economies of Scale // Status: shrinking as brands consolidate, driving ability to compete, and Google secures its place at the top of the funnel.
• New Technology and Product Offerings // Status: growing with investment in new technology, such as open APIs and fintech but facing competition from startups.
• Cross-Sector Offerings // Status: growing with new STR and tour operator inventory but needs investment and threatens margin dilution.

There was a time when the raison d’etre of an online booking site was simple: bring the largely offline travel industry online. Beginning in the late ‘90s and running well into the 2000s and 2010s, OTAs spearheaded the push to digitize the hotel and airline industry. 

Yet while some travel suppliers took embarrassingly long to embrace the web, all the major hotel and airline brands in the U.S. and Europe had done so by 2019. The pandemic forced a major digital upgrade for many remaining offline holdouts. 

Bottom line: While there is still opportunity in driving online bookings to offline properties, especially outside of the U.S. and Europe, we think that the days of riding this secular trend to 20%+ gross bookings growth are behind us. 

Discounting and Wide Selection of Inventory

The other classical driver of online travel bookings is the perception of value. Online travel agencies aggressively market their ability to offer discounted pricing. Big brand hotels and airlines have in the past decade invested significantly in pushing back against that perception. Hotels, for example, are getting better at enforcing parity and offering the same daily room rate on their website as is available on a booking site. Today, Expedia itself works with Marriott as an exclusive re-distributor of wholesale rates to stamp out non-parity rates. The two companies claim an 80 percent drop-off in Marriott ‘rogue’ rates appearing on metasearch sites. IHG just inked a similar agreement with Expedia. 

In fact, in some cases hotels and airlines have managed to flip the script by building significant value into their loyalty programs. Because the hotel will add on free benefits to loyalty members that are charged as separate ancillary fees to third-party customers, some suppliers are effectively offering discounts below OTA pricing even while holding onto the façade of rate parity. 

Recent research from Bernstein shows that when consumers search for hotels on Google metasearch that the direct website is most commonly the cheapest available option, in 22% of cases. Booking is tied for the second most common provider of cheapest rates, but that only occurs 11% of the time, a big step down from brand.com. Expedia.com is an even further step down at 4% of the time, but still in the top ten. 

This speaks to the growing challenges that online travel agencies face in offering like-for-like discounts. But even if an OTA may not always offer a discount relative to brand.com on the same room at the same property, we need to bear in mind that Expedia and Booking offer comparison shopping tools that can often yield a cheaper rate at a similar property. 

The largest hotel company in the world, Marriott, hosted nearly a million room nights in the most recent quarter; Expedia sold 93 million. The chain with the most hotels globally is OYO Rooms, with 15,000 properties; Booking Holdings offers more than 400,000. The scale comparisons are not even close.

This is an important point. The value proposition of an online booking site is increasingly not about providing a Marriott room at a cheaper price but in helping the consumer find a Marriott-like room from a different operator at a better rate. 

From the perspective of a branded hotel revenue manager, they have managed to stem the bleeding caused by OTA discounting because perfect parity is maintained. But as far as the consumer is concerned, they still found a discount on the third-party site by booking with a different operator. As Expedia and Booking get bigger, their ability to offer pure discounting is diminishing but their power as comparison shopping platforms increases. 

The main pushback against this that brands can offer is loyalty programs. These attempt to lock shoppers into the brands’ ecosystem and prevent cross-shopping. But these tactics are mainly available to branded rooms and independent properties still make up 30% of US and 60% of European rooms, leaving room for the booking sites to drive discounts in the independent space. 

Whereas once consumers could reliably find like-for-like discounts on hotel rooms online, those deals are harder to come by today. It also makes it harder for Expedia and Booking to earn the initial click if they cannot offer the cheapest rate for a given property when it is searched.

But shoppers can still expect to save by comparison shopping hundreds, if not thousands, of similar rooms in a given destination. This value-add is not going away, and in fact becoming even larger as both bring alternative accommodations online. 

It will also be boosted in the case of an economic slowdown, which looks increasingly likely. The pandemic was a crisis of safety and trust, but not a financial crisis. Thus, hotel groups did an excellent job in maintaining pricing power. But consumer balance sheets are likely to deteriorate in coming years and we suspect that not all hotels will continue to hold the line so firmly on ADRs.

Properties lowering rates to drive ‘heads in beds’ plays nicely into the online travel agency’s strong suit as their price comparison tools can highlight these discounts via the prevailing market rate and drive a race to the bottom that benefits the distributors over suppliers akin to what we saw in 2001 and 2008.

Bottom line: we believe that Booking and Expedia are still able to offer travel savings as part of their value proposition, primarily from comparison shopping, but that their edge here is diminishing as rate parity enforcement is succeeding.

Expedia Group and Booking Holdings are likely the two largest advertisers in the entire travel industry. There was a time when this was a major competitive advantage and central to each companies’ strategy. However, we believe that dynamics are shifting and that returns from marketing economies of scale are diminishing at both. 

Expedia and Booking were both some of the earliest businesses to embrace digital performance marketing. This channel is a powerful driver of demand that was initially not well understood and as a result these two OTAs saw outsized advertising return on investment.

Even as competitors wised up to the power of digital marketing, they found it hard to compete. Since performance advertising is sold via auction, having a large advertising budget was a competitive edge. Expedia and Booking built an advantage by leveraging marketing economies of scale. The two OTAs’ bigger budgets meant they were able to consistently outbid smaller hotel operators, driving bookings and margin to their sites, in turn funding larger ad budgets for the next quarter. 

Two main factors came together to stop this virtuous cycle. The first was consolidation of travel suppliers. The biggest travel operators, in both hotels and airlines, had grown their market shares substantially by 2019 relative to 2009. This means that the consolidated marketing budgets for the largest brands – Marriott, Hilton, Delta, etc. – are now of the scale to effectively compete against Expedia and Booking. This drives up the cost of the performance ad, and all else being equal, drives down the return on advertising spend. 

The second challenge for Expedia and Booking has been Google’s ability to cement itself at the top of the travel marketing funnel . In the past, OTAs had the ability to venue hop to drive up ROIs. If incoming bids from travel suppliers were driving up ad prices at one auction house, say TripAdvisor, an OTA could shift its spend to a more affordable venue, say Trivago. 

However, we believe that these travel specific metasearch sites have been losing consumer traffic share to Google metasearch. Data from SimilarWeb backs this up and suggests that Google became even more dominant during the pandemic jumping from a ~51% traffic share in the U.S. to 62%.

It’s not effective to shift your marketing spend to a different venue if it does not receive enough shoppers to provide strong ROI. Following the eyeballs has resulted in most travel advertisers crowding into a single marketplace, namely Google. 

This was a bad combination. Larger competitor advertising budgets chasings fewer venues meant that auction prices for clicks on Google had to rise – and ROIs had to fall.

This cost pressure had been building for years but perhaps Expedia and Booking would be able to use the pandemic as a reset and find a way to rebuild advertising ROIs? Our data suggests that, at least so far, this has not been the case. 

Both Expedia and Booking continue to rely heavily on Google for their performance marketing. Google ad spend, by our estimates, cost 13% of revenue at these two agencies in 2019. But by 2021, we estimate that figure to have grown to 16% of revenue. 

This stands in contrast to Airbnb. Pre-pandemic, the short-term rental site had been investing a similar share of revenue in Google ads. During the pandemic Airbnb shut off much of its performance marketing and saw little impact to its bookings. Airbnb today spends 1% of revenue on Google, a dramatic implied improvement in marketing ROI relative to Expedia and Booking.

Bringing it all together, we have updated our dataset tracking the marketing efficiency of Expedia and Booking. This compares the gross bookings to estimated advertising spend at each company. In effect, we are measuring how many dollars of gross bookings can be bought for one dollar invested in advertising. This is not a perfect measure, for instance there may be timing mismatches or we may be off in our estimate of ad spending, but we believe it gives us a rough sense of how effective the marketing teams are at Booking and Expedia. 

Given the discussion above, the updated trend is not surprising. Marketing efficiency has been on the decline for the last decade. In 2008 one dollar spent on ads at Expedia brought $26 of bookings in the door. By 2019, that dollar was 17% less effective, buying $21 of bookings. Similarly Booking Holdings saw its marketing efficiency fall 19% from 2008 to 2019.  

Interestingly, we believe that YTD Expedia has seen its marketing efficiency decline even further while Booking has recovered from a COVID dip back to its pre-pandemic operating level. 

Bottom line: Expedia and Booking are seeing their edge from marketing economies of scale erode as suppliers get better at performance marketing and Google’s metasearch share grows. The pandemic has not reversed this trend but rather seems to have amplified it. While Expedia and Booking remain powerful direct marketing machines this will need to be supplemented by new customer acquisition tactics. 

The classic booking site model of online convenience, value pricing, and performance marketing is still powerful but doesn’t drive the results it once did. The key question for both Expedia Group and Booking Holdings today is how they can supplement this core with new tactics that drive customer acquisition and, perhaps even more importantly, customer retention.

Both of these groups are experimenting with new products and technologies to achieve this while minimizing the cost of their Google “tax” bill. Top areas being explored are loyalty, mobile, and B2B partnerships.

As the saying goes, if you can’t beat ‘em, join ‘em. Loyalty programs are huge drivers of business for travel companies . 50-60%+ of passengers on U.S. airlines are loyalty members and these programs contribute 40%+ of room revenue at major global hotel brands. Points programs keep otherwise fickle travelers true to a given brand family. Loyalty membership has been among the most successful tools that travel suppliers used to drive a wedge between customers and online booking sites. 

But no online travel agencies loyalty initiatives has yet risen to the level where they are a serious competitor against hotel or airline programs. Booking.com has offered its Genius program for several years now through various iterations, with the most recent update in May 2022 . 

The Genius program is simple. It is split into three tiers, each with escalating levels of discounts available, starting at 10% back and growing to 20% off. Any customer that creates a booking.com log-in is automatically enrolled in Genius Level 1 and the more hotel stays booking with the company, the higher the level you qualify for.

The primary goal of this program is to create a closed user group – a contractual loophole that allows properties to avoid rate parity clauses – by requiring a sign in. Hoteliers that want to drive business are then free to offer discounted rates to Booking.com shoppers. The majority of loyalty discounts are funded by the hotels themselves.

The simultaneous biggest strength and weakness of this loyalty effort is its simplicity. Allowing anyone to sign up and qualify makes it a savvy discounting tactic to drive near-term bookings. But the program is too simple for its own good in other ways. The offering is, in our opinion, not robust enough to attract and retain high value travelers – you know the type, credit card toting road warriors. These customers will prefer points based programs run by airlines and hotels that can provide significantly more than 10% savings when used effectively.

That’s what makes Expedia’s latest foray into loyalty so interesting. Expedia previously had four different loyalty programs split across its different brands with separate offerings from expedia.com, hotels.com, Orbitz, and Ebookers. This summer it announced plans to retire each of these plans and replace them with a new offering, called One Key . The new program will be points-based and allow guests to earn and burn across all Expedia Group brands, including Vrbo. 

It’s been hard for Expedia to tie these all together because of different tech back-ends at each site. But as Expedia works to break down its internal tech silos, the program is expected to launch in 2023. Details are still scant but we know that it will port over 154 million members aggregated from across all of Expedia’s existing programs. For context, only Marriott would offer a larger loyalty program than Expedia.

Will consumers find this new loyalty to be a value add? It will likely offer less monetary value than a dedicated single-supplier loyalty program. But Expedia will attempt to make up for that by offering greater flexibility to redeem points across brands and product types (e.g. earn on flights and redeem on short-term rentals). It is also likely that Expedia points will let users double dip on earning airline miles, which can be a powerful perk (e.g. when redeeming Expedia points, the user still earns their airline miles for the flight). 

Expedia CEO Peter Kern told Skift that this program will be targeted at the mid market of travelers who take several trips a year but not enough to earn top-tier hotel or airline status. “The real point is that most people don’t ever earn enough in rewards programs to get much reward out of it,” he said. “And for us, we have millions of members who can get a benefit, even if they’re traveling one, two, three times a year and … staying in different hotels and needing to take different airlines… So I think we serve a really important role there… and we want people to enjoy our brands as a family of brands and products as opposed to discrete things you just go into and think of as a single brand.”

Unlike the Genius program, Expedia will be funding a lot of these loyalty discounts itself. This should make the program more consistent, and perhaps even more valuable, but it will come with a greater cost than Booking.com pays. Loyalty driven promotions and discounts will likely show up on the income statement as a contrarevenue item, hiding not in the expense line items but as a reduction in Expedia’s take rate. 

It’s far too early to judge the success or failure of Expedia’s loyalty initiatives but it speaks to the company’s need to close the back door on customer turnover. “There’s a mass of people that are up for grabs every day.”, Peter Kern, Expedia’s CEO explains. “The challenge hasn’t been buying them… The challenge has been keeping them.” 

The new One Key is central to this strategy which in turn all ties back to online advertising return on investment. Lower turnover maximizes customer lifetime value (LTV) and allows Expedia to bid higher on online auctions and still maintain a profitable return on investment. Loyalty becomes the key to Expedia being able to compete effectively in a world of structurally higher online travel performance advertising  costs.

Mobile applications are another important strategy being pursued by Expedia and Booking.  Shoppers are moving towards a mobile-first world and increasingly prefer the convenience of an app. Today we estimate that a third or more of all hotel and airline revenue is booked via mobile devices. There is even a higher rate of phone usage when browsing and searching for travel, with nearly 50%+ of hotel and airline traffic share coming via phones.

Even better for OTAs, mobile apps are by definition a form of direct traffic that avoids performance marketing costs. This makes apps an easy win-win for Expedia and Booking in that it drives customer satisfaction while avoiding expensive marketing costs. 

Booking CEO Glenn Fogel said that, “about 45% of our room nights were booked through our apps in the third quarter [of 2022]”. That is up from ~35% of room nights in 3Q 2019. An even higher share, 60% of room nights sold were via mobile channels in 3Q 2022, with the differential mostly due to mobile web usage outside of the dedicated app. At Expedia Group, CEO Kern disclosed that, “app users drove over 2.5x the gross bookings per customer, 2.5x the gross profit per customer and 2.5x the repeat bookings versus non-app users.” 

That’s not to say the mobile channel is completely free. There is still research and development costs that can add up to be quite substantial and both Expedia and Booking have been using direct performance ad campaigns to drive app downloads. Plus if you take bookings via iOS, Apple will take a cut. But even so, the development part of the expense equation still leans into the booking sites’ tech advantage. Their development teams are better positioned to launch and maintain apps than peers. 

The most downloaded online travel agency app in the U.S. in the first half of 2022, according to Apptopia , was Vrbo. Booking.com was number three, while brand Expedia took fourth place. Booking.com’s app “was the only online travel agency app to consistently gain market share in the U.S. in 2022,” Apptopia said. Booking.com investing in Snapchat ads may have had a large role to play in driving downloads.

Mobile apps front-load a lot of customer acquisition expenses. You need to spend upfront in R&D and you still will pay via performance advertising to drive downloads. But the hope is that once the app is shipped and downloaded you will be left with a user base of direct shoppers driving repeat visits and bookings.

Partnerships

We have thus far assumed that there are only two options for travel bookings through an online travel agency or direct through a supplier. But the reality is far more complicated than that. Many airlines offer hotel bookings, hotels offer car rentals, and every combo in between. 

But it is not just travel companies attempting to up their ancillary game. Travel has a strong lifestyle halo surrounding it that non-travel companies are looking to cash in on. These “non-endemic” businesses have a non-travel core product but want to affiliate their brands with the jetsetter lifestyle in shopper’s minds. Most obvious are credit cards that have built travel platforms but there are many others out there as well. 

Online travel agencies have realized that partnering with businesses looking to merchandise travel presents a strong opportunity for a win-win by leaning into each platform’s comparative advantages. OTAs have a true comparative advantage in building travel inventory and online tech tools but their customer acquisition costs are rising. Meanwhile these third-party brands have direct traffic, since the prospective traveler has already landed on their ecommerce portal, but would find building out a wide selection of travel products cost prohibitive.

Both Booking and Expedia have been focused on building B2B solutions to take advantage of this opportunity. It’s true that there is a cost because the OTAs need to split their commission with a partner but on the flip side there is no need to spend any money on advertising since the marketing partner bears the full customer acquisition cost. 

Booking doesn’t disclose B2B revenue but did spend $1.2 billion to acquire Getaroom in December 2021 . Getaroom is a B2B distributor of hotels that signs wholesale deals for rooms and distributes them through its affiliate partners. Booking also runs Priceline Partner Solutions, an affiliate program, but out of the big two, Expedia has made the largest push into the B2B space. Expedia now generates 22% of revenue from B2B partnerships, nearly $2B YTD.

Expedia’s B2B sales are primarily driven by its partner solutions business which offers white label and co-branded solutions. The platform allows partners to sell Expedia travel products throughout their checkout process. When an airline offers ancillary sales of hotels or car rentals in a given destination after buying a ticket, the inventory is often offered by a white label third-party like Expedia. For instance, Expedia will partner with Jetblue to sell some hotel rooms.

Outside of travel suppliers, Expedia has also built white label relationships with corporate and offline travel agencies, credit card companies, AARP, and other similar platforms. It will even partner with other OTAs as in a recent deal to provide Vrbo short-term rental inventory to Hopper .

Expedia recently launched a new API platform, called Open World, to drive further bookings. This new API will be based around microservices to deliver “payments, fraud, conversations, and service, that anyone can use to accelerate, enhance, or even enter the travel business.” Rather than simply plugin in inventory as might be the case now, the goal is to offer more ecommerce building blocks to third-parties. 

CEO Kern teased it as an entrance into the creator economy. He specifically highlighted the potential for a TikTok influencer to build an online travel booking platform customized to their audience to allow them to monetize travel content. 

Kern wants Expedia to, “get to the point… where small entrepreneurs can use our technology to get into the travel business. So if you are an influencer, and let’s say you’ve got 100,000 followers because you write about travel for people with physical disabilities, we can power you to turn those ideas into trips… Not just a link, not just an affiliate deal, but a real ability to sell travel.”

While we suspect the majority of users will be banks, travel agents, loyalty programs, as is the case today, the possibility of building B2B partnerships far outside of typical use cases is intriguing. 

It is also worth emphasizing that Partnerships are not a panacea. If Expedia or Booking are not careful they could wind up cannibalizing their own business, and customers that don’t have a direct relationship with a brand don’t repeat, and lower the overall OTA customer lifetime value. Expedia and Booking need to tread lightly to avoid finding themselves in the same situation, reliant on third-parties for bookings, that hotel brands found themselves in a decade ago. 

However in the case where the customer was not going to shop via an online booking site in any case, then the B2B partnership is all upside, even if it comes at a lower take rate. A little cannibalization might be an acceptable price to pay for this new audience. 

We suspect that, on balance, a large share of B2B2C customers are not being cannibalized since if they are airline or hotel loyalty members or if they are coming via a travel non-endemic then the odds of them booking via an OTA were slim to begin with. And the potential to crack the market for influencers and creators to sell travel via white label could drive major upside.  Bottom line: Metasearch is consolidating and returns to scale from marketing are shrinking. Expedia and Booking are turning to innovation and new products to drive traffic and bookings that don’t require paying a performance advertising toll. We see growing potential for new loyalty programs, redesigned mobile apps, and B2B partnerships to drive incremental bookings.

Cross-Sector Offering s

How can online travel agencies drive customer acquisition in new ways that avoid incurring performance marketing costs such as the Google “Tax.” We looked above at new product launches and technology but there is another answer. Build a more holistic travel experience. If you have a genuinely more delightful booking experience than travelers will come to you direct.

Travel suppliers often see themselves in silos, providing just a single service. Airlines specialize in flights, hotels in rooms, and what about the actual day-to-day activities? Travel agencies are one of the few spaces that can see the forest for the trees and look at the whole trip. This is a huge built-in advantage since it aligns with the customers’ vision of the trip. Travelers are frustrated by needing to piece together multiple pieces of their trip from different suppliers. This is where OTAs can stand out by offering all-in-one convenience, like the offline travel agents of old used to do. 

Expedia today offers a wide range of travel services including flights, hotels, accommodations, cruises, and day tours. We discussed earlier how that diversification away from hotels has been holding them back during the recovery, but long-term we see a benefit. Expedia’s challenge though has been integrating its many different product offerings across its many brands. Vrbo’s short-term rental inventory, for instance, was long siloed from Expedia’s other offerings.  

Booking Holdings on the other hand, has long focused almost entirely on accommodations. At first that was just hotels, but over the last half-decade it has added a substantial amount of alternative accommodation. Today 30% of Booking’s room nights were from short-term rentals. 

Booking has big ambitions to launch a more holistic product offering, with the objective of positioning itself as a one stop shop for consumers. They call it the Connected Trip. As early as 2019 CEO Fogel said that, “If you want to create this connected trip that makes [a trip] so much easier, you’ve got to do all parts of it.” 

In November 2021, Booking Holdings entered into an agreement to buy flight provider eTraveli for $1.8 billion, although the deal is still under regulatory review. Offering flights seems to be gaining traction with the company reporting Airline ticket sales up 235% in Q3 2022 over 2019 levels and up 45% compared to 2021. 

Booking sees flights as an important tool to drive new customers into their ecosystem, especially since so many trips start with purchasing a flight first. Seeming to underscore that it’s strategy is working, 20% of all flight bookings in Q3 2022 were from customers new to booking.com.

Booking is also working to launch a number of other connected trip initiatives such as better integrated ground transport and standing up a fintech unit to allow more suppliers and more sectors to accept customers via booking.com, as well as to upsell products like travel insurance. 

Bottom Line: Consumers don’t view the travel industry as divided into the slices that travel insiders carve out. Having a delightful and holistic travel booking experience is a major differentiator and if done successfully can drive direct traffic and repeat business. Ironically, in building out multisector convenience, online travel agencies are following the path of their offline travel agent ancestors. We see both Expedia and Booking investing in building their multi-sector product offerings and driving growth through cross-selling.

Booking and Expedia are both recovering nicely from the depths of the COVID-19 pandemic. Booking Holdings is recovering faster due to its tilt towards hotels while Expedia’s airline exposure is a drag. Expedia has done a better job deleveraging than Booking, though the latter still holds the overall margin advantage. 

Booking Holdings continues to make headway in the U.S. and saw notable progress during the pandemic, but Expedia still holds the lead in North America. Sales and Marketing spend continues to be a major expense and we see little signs that performance marketing efficiency is improving post-pandemic. However, both have invested heavily in brand marketing, loyalty, and new product offerings to drive customer interest and are seeing these initiatives pay dividends in the form of direct or organic search traffic. 

From a long-term perspective Expedia and Booking are seeing two of their largest tailwinds deteriorate as ecommerce becomes the norm and as suppliers get more savvy about online marketing and rate parity. Instead they will need to invest in driving broader inventory, innovative technology, partnerships, and holistic travel offerings. 

Expedia Group and Booking Holdings have invested heavily in many of these initiatives. Expedia is focused on launching loyalty and B2B partnerships. Booking Holdings is investing in new tech, including apps and fintech, and in matching Expedia’s cross-sector offering. 

The travel industry is shifting and Expedia and Booking are revamping their strategies, but both remain formidable travel competitors.

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November 30, 2015

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Travel Agent vs. Booking Online: Why Travel Agents are Still Important

As technology continues to change our lives, specifically the way we travel , travel agents are pit against travel sites, such as Travelocity, Expedia and Orbitz, in a battle of better travel. This travel agent vs. booking online struggle may seem like an impossible victory for travel agents—since many people attempt to plan their trips themselves—but the opposite is actually true.

Even though it appears cheaper and simpler to book travel on your own, it just isn’t the case. In fact, planning a trip is much more difficult than ever before because the people trying to do it all on their own don’t reallymuch about the travel industry. However, some travelers are recognizing their past mistakes and turning to the experts for guidance once again. As reported in 2014 by MMGY Global —a travel-marketing agency that researches travel patterns—wealthy and millennial travelers are starting to rely less on travel sites and more on travel agents.

Using a travel agent is the smarter option. It’s the best way to make sure that every trip you go on will run smoothly. Besides having someone else to bear the brunt of the travel planning process besides you, travel agents have access to inside information regular consumers just aren’t privy to.

Here are 9 reasons why using a travel agent vs. booking online isn’t much of a competition:

1. It saves you time

All you have to do is communicate to a travel agent what type of trip you want to go on and then sit back to hear what location, resort or cruise line would work best for you. There’s no need to sit on a computer for hours and visit countless travel sites when travel agents are paid to know everything about travel and arrange the best trips for their clients.

2. They love what they do

Travel agents are passionate about travel and helping customers bring out their inner travel enthusiast too. They’re not planning trips because no one else in their group of friends wanted to take the time to arrange everything, so they got stuck doing it. They love going to new places themselves and want all of their clients to feel the way they do when they travel.

3. They have first-hand experience

Most travel agents go to many destinations on their own, not only because they enjoy it, but because it allows them to get first-hand experience. They can take their newfound knowledge about a certain location, hotel, resort or cruise line, and relay that information back to their clients. For instance, InteleTravel is a host agency that allows people to become independent travel agents. We offer our agents education resources in which they can go to different locations and learn as much as they can about travel in order to become experts.

Though you can read customer reviews, the credibility of those reviews are always in question. It’s better to hear from a travel expert and his or her take on a travel destination than a stranger on the internet. Having access to this knowledge helps you get a good idea of what to expect, which allows you to avoid any surprises on a trip.

4. They know what they're doing

Although you might think you know what you’re doing when it comes to travel planning, you are most likely unaware of certain travel industry secrets. For example, most travel sites are actually owned by one or two companies. This means all that time you spent comparing prices wasn’t worth it because there’s a good chance you were comparing two sites that are owned by the same company. Using a travel agent allows you to skip over this obstacle.

Travel agents offer their clients valuable advice as well. They can recommend the best cruise lines for families or solo travelers. They know the best time of year to go somewhere and the most popular resorts that offer great amenities and that have must-see attractions. If you need a car rental on your trip, they’ve got you covered. If you’re not sure if travel insurance is necessary, they can point you in the right direction. If you’re required to bring any travel documents, they will inform you. Travel agents can even help you plan an itinerary for your trip and book any activities that you are interested in doing.

5. It's a real relationship

When you work with a travel agent, both of you get to know each other. You’re not conversing with a faceless website that doesn’t really care about your travel preferences, any further accommodations you need or what your budget is. Travel agents really care about their clients and the last thing they want to do is arrange a trip for someone who ends up unhappy with the end result. Think of it this way: If you knew someone who was a travel agent, or if you yourself were a travel agent, friends and family would rely on this person to book their trips rather than a stranger. Booking engines are strangers. There's no real relationship. Interacting with a travel agent—an actual person—who knows you and has your best interest at heart is a real relationship.

6. They have connections

7. It's like having your own travel encyclopedia

What if you know that you want to go on vacation with your family, but you have no idea where? Having a lot of personalities and preferences in a travel group can be overwhelming for anyone, especially when you know that if someone is unhappy with the destination or hotel, for instance, you’re going to have to hear about it for the rest of the trip—and probably afterwards.

A travel agent can listen to specific requests or ideas. If one person wants to go someplace tropical in order to relax on the beach every day while someone else wants to go someplace that has extreme sports, a travel agent can find a location that offers both. You may be set on going to the Bermuda, but realize you’re more interested in activities offered in the Bahamas. If you’re traveling with your children or grandchildren, finding a location that has kid-friendly activities will be high on your priority list as well. They know what locations, resorts, hotels and cruise lines can best suit your needs and make everyone happy. Sometimes you need more than generic advice from a website to guide you. That’s where travel agents come in.

8. You spend less money

You might assume that an agent is paid out of your pocket.The truth is that their payment comes from the supplier, never from the client. How does that benefit you? Suppliers offer discounts to travel agents to entice them to book their clients at their venues, so agents have access to steep savings that just aren't available to consumers who book themselves. For this reason, you save much more money on travel thanks to their help. So not only will you get to go on an incredible trip without having to do the work, but you’ll be able to go at a fraction of the cost. And as an InteleTravel agent, you actually earn a commission for booking that upcoming winter vacation, and basically get paid to travel .

9.You're never alone

A travel agent is just a phone call away, so if a problem arises at any point during a trip, you have someone to turn to. Providing customer support is what continues to set apart travel agents from booking engines. There will always be a real person on the other end of the phone. Booking all your travel arrangements online means that you’re on your own if you have any questions during your trip. For instance, let’s say there’s an issue regarding your hotel reservation. Having worked with a travel agent rather than a website, you just have to make a phone call and he or she will find out what is going on and fix the problem for you.

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Using a Travel Agent vs. Booking Online: An Infographic

What would you say if I told you that travel agents aren’t in competition with online travel agency giants like Trip Advisor, Booking.com, Expedia, Priceline, and others? Maybe you’re waiting for a punchline, but I’m honestly not telling a joke.

While starting a home-based travel agency in the shadow of internet giants like Expedia can feel like a David vs. Goliath scenario, I’m here to bring you glad tidings of the ways in which travel agents have an edge over OTAs.

Looking ahead to 2026, OTA market share is projected to dip one point to 21% while travel agencies are predicted to increase their market share 5 points to 26%.

Not only that, but travelers are beginning to recognize the value of an advisor. In 2023, the American Society of Travel Advisors (ASTA) reported 50% of travelers were more likely to use a travel advisor than in the past. 1 .

Want more good news? Phocuswright reported that in 2022 travel agencies comprised 21% of US travel market channel share, only one point behind online travel agencies (22%). Looking forward to 2026 however, OTA market share is projected to dip to 21% while travel agencies are predicted to increase their share 5 points to 26%.

So yes. Travelers are using advisors! And yes! Travel agencies compete with OTAs. So suspend your doubt and hear me out. We're going to chat on how travel agents save travelers TONS of time (and money) on their vacations!

No Seriously, Americans Spend So Much Time Online Planning Travel, It’s Ridiculous.  

Expedia Media Group's research documented that American travelers spent an aggregate of 8.7 capital-B-BILLION minutes of travel planning and booking time in 2015. It seems ludicrous, right? I know, I did a double-take. But that is the amount of time Americans spent consuming digital travel content in 2015, according to their white paper, “ The American Traveler’s Path to Purchase .” 2

In the 45 days prior to booking travel—from beginning research to final purchase— the traveling American visited a whopping 140 travel websites . No seriously, that is not a typo.

How much time does this add up to? Well, the report indicated that in the six weeks prior to booking, Americans consumed 22.95 hours of digital travel media .

Is your jaw on the floor yet? Well, it’s about to get even more slack: According to the Bureau of Labor Statistics, the average hourly wage in the U.S. as of Jan. 2021 registered at $29.96/hr 3 , which means that it costs American travelers roughly $687.58 of work time to plan and book vacations.

What does this mean for travelers?

A). A traveler can plan and book their vacation while they’re on company dime (preferably not one they own) and hope they don’t get fired for it. Or, better yet . . .

B.) Go with a travel agent, don’t get fired, and save over $700 of their time.

How OTAs Work, and Why They Don’t Save Travelers Money Anymore

The $700+ savings in work time really just scratches the surface. There are tons of other ways that using a travel agent vs. booking online saves clients money.

1. OTA Access to Inventory Is limited

When you were a kid and asked your parents for a snack, they probably didn’t open the fridge and cupboards and let you have at it (let alone take you to the grocery store to pick whatever you wanted). No, they probably pulled out a few choice items and said, “this is what you can choose from.”

OTAs operate in the same way. OTAs used to rely on ample off-peak inventory, and empty seats on planes and rooms in hotels to offer discounts, and it worked 4 . Vendors would dump their excess inventory on OTA sites for a premium commission to OTAs. Heck, at the end of the day, selling a hotel room for cheap is better than zippo, right? But the OTAs are no longer the land of milk and honey they used to be.

There was a huge rise in the number of OTAs and suppliers smartened up, doing things like having contracts where OTAs were not able to offer prices lower than what the traveler could find directly on the brand site. They stopped offering premium commissions, and some vendors (like Southwest) even refused to sell their inventory on OTAs. (Does this sound familiar? Airlines did the same thing, cut commissions to travel agents in the 90s).

In fact, it’s the vendors that price the products—not the OTAs themselves. So, like the stingy parents, OTAs will not offer the smorgasbord of travel products and discounts they used to. They can’t.

Now let's jump back to the travel agent vs. booking online thing. A travel agent will open all their cupboards and find the best value available. Heck, they’ll even take you to the grocery store and present a full range of available travel options. Travel agents not only have access to products and pricing, but they also have the savvy to know the nitty-gritty of things like which airlines offer more spacious seating or provide better beverage service for the same price.

2. Price Discrimination and “Steering”

According to the same Wired article above, the OTAs' pricing would shift constantly due to supply and demand. This means that customers could potentially be directed to sites that weren’t the best deals, depending on the quantity demanded while the traveler books their trip, trying to create a false sense of urgency for travelers to book with warnings like, “2 rooms left at this price?”

OTAs with their Big-Brother-like technology know when and how a traveler is booking. So if a traveler is attempting to book a hotel on a mobile phone the same evening of their desired reservation date, the OTA’s magic algorithm will smell their desperation and potentially steer the customer to a more expensive booking.

Price discrimination comes into play when they charge different consumers different prices for the same product (which is illegal). According to the Wired article, at one point, “Orbitz was steering Apple OSX users, for example, to more expensive hotels, since the algorithm assumed that an Apple user was more affluent than a PC user.”

Agents don’t, and can’t, do that. There is a level of price stability when purchasing from a travel agent—who can put holds on tickets and packages to preserve the price until the end of the day or for 24 hours.

3. Fine Print

Surprise! There are taxes and fees that might sneak up on the purchaser when they get to the checkout of an OTA. With travel agents, the full cost to clients is transparent at the time they are quoted the price. (Enough said!)

4. Group Bookings

Travel agents can especially save money for clients traveling in groups. According to SmartFlyer’s CEO Mike Holtz in a Travel Market Report's "Here's Why You Should Use a Travel Agent Instead of Booking Online" article , “travel websites will only show the lowest fare available for four tickets. But an advisor might be able to find three seats at a fare hundreds of dollars less, with savings into the thousands of dollars.”

Travel agents, who are not governed by algorithms, have the experience and ability to analyze the options in front of them, filtering through them quickly in order to build group packages that maximize value and save money for their clients. Yet another reason to use a travel agent vs. booking online.

I know, I’m probably preaching to the choir. But what does this mean, and what does this add up to? Well, according to ASTA’s 2016 study, “Best of Both Worlds: Quantifying How Travel Agents Save Consumers Time and Money," a travel agent saves the traveler, on average, $452 per trip. 5

So if you count money and time, that brings up our tally of savings to $1,170+. Dang. Good job, travel agents.

But how do you articulate that to clients? How can you tell them that you’ll save them a ton of time and a nice wad of cash by booking their trip for them? They might look at you like you’re bonkers. But that’s okay, we’re here to help you with talking points with a snazzy infographic explaining the differences between using a travel agent vs. booking online.

How to Talk to Clients About Using a Travel Agent vs. Booking Online

Don’t you get tired when people express alarm at the existence of travel agents? Does it take a little restraint and energy not to roll your eyes when people say they can just book online? I know it does for me.

So we made an infographic that walks you through the data. You can print it out and post it above your office desk to use as talking points when your clients call and ask why they should use a travel agent vs. booking online. Better yet, just send it directly to your client and save yourself a lot of talking. 

Do you want it for a keepsake? You can go ahead and sign in below to download the infographic! You can even print it and use it to wallpaper your office, or better yet, post it on your own travel agency website!

This Is to Mention Nothing of Customer Service and Client Satisfaction

Travel agents save clients money, but the benefits of booking with a travel agent go way beyond. Travel agents also create high-value travel over OTAs because (the living, breathing, talented humans that they are) are able to advocate for clients when things go awry.

Travel Market Report published an article, " What We Did for Love: Tales of Travel Agents Who Went the Extra Mile, " in May 2019. It recounts stories of travel agents like Linda Schreiber, who pulled her bride out of a hurricane-riddled Cancun to the safety of home and rebooked the 70 other guests for the following month. Or Valerie Gossett's warm fuzzy in our Travel Agent Chatter podcast who coordinated with her BDM to have her client's father, a 90-year-old retired colonel, celebrated and honored for his service on his last cruise with his family.

What can an OTA do for a traveler who is unhappy with a hotel room, let alone stuck in the middle of a natural disaster? The answer? Not much, if anything at all.

Travel agents are able to leverage their relationships with vendors in order to provide the best customer service possible to travelers. So not only will the traveler save money, but they can travel with the peace of mind that a travel agent can help them out in a bind if they transfer hotels, switch rooms, or re-book a flight.

In the same ASTA study referenced earlier, it was documented that “ 63% of consumers polled said using an agent makes their overall trip experience better.” So not only will travel agents save travelers time, money and stress during the planning and booking process—they’ll also help create a more satisfying and relaxing travel experience during the trip itself . . . and that, my friend, is the entire purpose of a vacation.

Now Go Tell Your Clients (and Friends, and Travel Agent Naysayers)

Nothing speaks louder than data, right? Go let those skeptics know. If you don’t want to go on a monologue about the value of travel agents, just direct them to the infographic, and save your breath (and sanity).

What are some other ways you help save clients time and money? How do you pitch your value to clients? I want to hear about it in the comment section below!

[This blog was originally published in Oct. 2017. We periodically update this article with new data as it becomes available.]

• Source: ASTA’s 2023 March Consumer Research Headlines ↩
• As of 2022, this study has not been republished with more current numbers. ↩
• Source: Bureau of Labor Statistics ↩
• Source: Wired article, "Why Bargain Travel Sites May No Longer Be Bargains" ↩
• Source: Travel Market Report, "Why Consumers Don't Use Travel Agents" ↩

About the Author

Mary Stein has been working as a writer and editor for Host Agency Reviews since 2016. She loves supporting travel advisors on their entrepreneurial journey and is inspired by their passion, tenacity, and creativity. Mary is also a mom, dog lover, fiction writer, hiker, and a Great British Bake Off superfan.

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A travel agent "may" be able to help if a problem arises better than an online site. If the price is the same, try a travel agent. Otherwise, use an online site.

I book with both travel agents and online sites depending on price. Many times your local travel agent will meet any pricing you find. Try to get a price match from them and if they are unwilling to match or beat what you found then book with Expedia.

Travel agents will also price match any online offer you find, so it may not hurt to show the deal you can get to one and then you'll have the best of both worlds...good price and a real person to talk to if you need one.

Expedia is a travel agent but an online one.

Local travel agents cannot always match a price you find on Expedia or other major sites because they lack the volume. I havent used a travel agent in years and strictly booked with online sites. Never a problem.

I got a really good deal using travelocity. I was a little nervous until I checked in because it was such a good deal. I had two travel agents try to match but they couldn't come close tried selling me there transfer was worth paying 400 more per person. I e-mailed resort to confirm before we left. We had no problems. I feel safe using the online guys. Good luck

When I am planning a trip I usually check all of the travel sites to see what the price is going for these days. Then I check with my travel agent....I use the same one, she is wonderful. She has always come out below the travel site. The first price she gives me, no going back and forth. Its not just about saving a few bucks, but also about the peace of mind I have when traveling that I have someone that I have built a relationship with that is just a phone call away if a problem arises.

By using a travel agent multiple times I feel like we get the best of both worlds. A great price, and someone in our corner should we need her.

One of the big positives of going through a travel agent is having one dedicated person that you can talk to or show up in front of if something goes wrong.

We had booked both ways until we had an issue which the online site wasn't helpful at resolving and it took us 23 hours of phone calls to get resolved. Had a different issue 2 years later using a TA and TA had it fixed in less than an hour....

Travel Agent's can price match or beat almost any deal you can find and (God forbid) if something comes up they can deal with it better than you can.

Travel Agent all the way!

Good feedback.thanks everyone! 1st trip out the states and i don't want anything to go wrong.

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Is it better to book a cruise through a travel agent? We say yes

Going online to book an airline ticket or hotel stay is a familiar and fairly easy transaction. When you book a cruise, however — particularly your first cruise — you might want to reconsider the impulse to handle the transaction yourself through a cruise line website or an online advertiser with cheap prices. This DIY approach might not be the best way to find your dream vacation at sea.

In reality, it's not that simple to book a cruise. You will likely run into a lot of questions to which you have no ready answer.

That's where specialized cruise travel agents come into play. Their expertise can help you avoid mistakes, whether you are a first-timer or a repeat cruiser checking out a brand you have not tried before.

For cruise news, reviews and tips, sign up for TPG's cruise newsletter .

Why you should book through a cruise travel agent

You should consider booking a cruise through a travel agent because a knowledgeable agent can help you understand the nuances of a cruise purchase and help you make the best decisions for your vacation preferences.

When you book a cruise, you are making a vacation decision that goes way beyond a flight or hotel nights. Which ship you choose determines your dining and evening entertainment choices for the duration of your vacation. Which itinerary you choose impacts which destinations you'll visit and which shoreside activities will be available to you. It can be overwhelming to evaluate the options on your own if you've never cruised before.

In addition, cruise fares can be hard to understand and compare. You might, for instance, see a fare listed online without the port charges, taxes and fees, which you only see after you give your personal details.

Plus, the price of your cruise includes accommodations, meals, entertainment and activities — and in some cases drinks, tips, shore excursions, Wi-Fi and other extras. There's a lot bundled into some fares and not as much with others. A travel agent can help you determine what your cruise fare gets you. The cheapest base cruise fare does not always provide the best value or best overall vacation deal.

Related: 4 scenarios when you should use a travel agent

You aren't just booking general passage on a ship, either, as you will be asked to pick a specific cabin and when you prefer to dine. Making a mistake in these categories can ruin your cruise experience, as there are such thing as "bad" cabins and dining times (think noisy or claustrophobic cabins, dinner at 8 p.m. with cranky children, etc.).

With cruises, you typically don't pay for your whole vacation upfront but rather put down a deposit, with final payment due at a later date. A cruise travel agent can ensure you don't miss any due dates.

Remember, you might be a DIY type when booking airlines and hotels, but booking a cruise is more complex. If you enjoy doing your own research, focus on what to do and see in the ports of call. Read about different ships, cruise lines and itineraries. However, when it comes to booking the cruise, we recommend you still contact a travel agent who specializes in cruises to help you learn a few tips and avoid any rookie mistakes.

Travel agents can get better deals on cruises

If you're concerned that working with an agent will make your cruise more expensive, don't be. Cruise travel agents receive the bulk of their income via commission from the cruise lines. Their service to you is usually free, though some might charge first-time clients a minimal fee. It's worth it.

In addition to sharing their expertise, the agent may have negotiated group space at lower rates with the cruise line, which could save you money on the cruise fare. The agent might also have first access to sale prices because the cruise lines notify their agent partners and loyalty club members first before they announce a sale to the public.

Related: 6 ways to get a deal on a cruise

Some cruise travel agents even throw in booking perks , such as a complimentary bottle of Champagne, awaiting your arrival in your cabin.

How to find a travel agent for a cruise

Cruise lines prefer that you use a travel agent rather than going online and booking directly. They have small in-house reservation teams, and when you have a question while making a booking, good luck in getting an expert on the phone in a timely manner.

Companies such as Royal Caribbean and Carnival Cruise Line provide online directories to help you find an experienced cruise travel agent near you.

You can also find experienced and certified cruise travel agents through CLIA, the Cruise Lines International Association , which is the industry's main marketing group. Asking friends who have cruised to recommend a travel agent is another good idea.

Related: 5 unexpected places that sell cruises

You might get more personalized care from smaller agencies than from the huge online agencies, though websites such as icruise.com, Cruise.com and Cruise411.com also have experienced cruise agents. These larger online travel agencies can be a good option for those who prefer to make decisions and ask questions via chat. Just make sure you get the name and phone number of the representative for any follow-up questions.

Questions to ask a cruise travel agent

In choosing a cruise travel agent, you will want to tap into the person's specific expertise about the cruise line and ship you are considering. Anyone can read a ship deck plan outlining ship spaces (which you can find online), but you are looking for people who really know their stuff.

Look for travel agencies that are cruise-only or a home-based agent who specializes in cruises. If you are using a full-service travel agency, ask for the cruise desk.

Here are some questions to ask a travel agent to determine their expertise:

• How often do you cruise?
• Have you cruised on the line I am considering?
• Have you cruised on the ship that I am considering, or do you have clients who have cruised that ship and provided a review of their vacation?
• Do you have firsthand knowledge about the cruise destination? The itinerary?

You will also want to ask the travel agent if they have a preferred relationship or negotiated agreement with any specific lines that could lead to special perks for you.

Be aware that not all agents work with all cruise lines; some represent only a few preferred suppliers or specialize in higher-end cruises. They get bigger commissions from their preferred lines.

This is not necessarily a bad thing, but be aware if the agent seems to be putting you off the line you were originally considering, as this could be the reason. On the plus side, an agent who is a preferred supplier might have negotiated rates with the cruise line and be able to call in favors, such as that bottle of Champagne or a cabin upgrade .

You should also ask if the travel agency offers 24/7 assistance (usually an 800 number) in case you have last-minute questions or something goes wrong before or during your trip.

The cruise travel agent should have questions for you as well, to better understand your dream vacation desires. If you are calling a cruise agency for the first time, the agent should be interviewing you as much as you are interviewing him or her. The agent should be focused on helping you choose the cruise line , ship and cabin that is right for you. Making the correct choices is very important to your overall cruise experience.

Bottom line

Booking a cruise is a complex enterprise. A cruise travel agent will guide you through choosing your cabin and dining times, deposits and final payment, and options for shore excursions and specialty dining. If you need to cancel the trip, the agent will also help you through the refund process. You'll have a lot less stress before and during your vacation if you book with an experienced agent.

Planning a cruise? Start with these stories:

• The 5 most desirable cabin locations on any cruise ship
• A beginners guide to picking a cruise line
• The 8 worst cabin locations on any cruise ship
• The ultimate guide to what to pack for a cruise
• A quick guide to the most popular cruise lines
• 21 tips and tricks that will make your cruise go smoothly
• Top ways cruisers waste money
• The ultimate guide to choosing a cruise ship cabin

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