While the traditional travel agency became obsolete with the establishment of the digital world, online travel agencies (OTAs) in Europe are playing an important function in the accommodation market, providing greater choice to travelers and benefits to the economy, a recent study suggests.
1. Choice and transparency
OTA’s relevance was highlighted in an Oxford Economics’ study which analysed the economic impact of online travel agencies in Europe between 2019 and 2021. In short, the study found that OTAs help to increase choice and transparency within the market, making it easier for consumers to compare the costs and quality of the accommodation facilities and services offered by providers. For example, of the 1.2 billion nights booked through OTAs in 2019, 11% would not have taken place without the benefits OTAs provide, the study states. Additionally, 134 million additional nights were generated through the increase in choice, transparency, and trust provided by OTAs.
2. Global visibility
Online travel agencies also make it easier for customers to search and book online, a particularly important feature for booking travel in unfamiliar destinations. As a result, OTAs generate more bookings from international travelers than the market average. Moreover, OTAs particularly benefit small independent properties by providing them with global visibility. Over 60% of international overnight stays in the EU booked through OTAs were arranged by individuals from countries within Western Europe. For all international overnight stays within the EU, arrivals from Western Europe accounted for a similar share.
3. Benefiting rural areas and employment
Offering more choice also spreads out tourism away from the urban centers of economic and touristic activity towards rural destinations, giving rural areas benefits from an increase in economic opportunities and job creation. In 2019, around 40% of nights booked via OTAs were in rural areas, compared to 16% across the whole market.
OTAs have generated large volumes of additional tourism nights and supported GDP growth and job creation across a wide range of destinations. If OTAs did not exist, the study found, there would be fewer overnight stays in Europe and the contribution of tourism to GDP and employment would also be lower.
According to the study, 566,000 additional jobs were created in Europe in 2019, up from the 243,000 created in 2021. In 2019, OTAs generated an additional €33.7 billion in GDP in Europe, falling to €11.8 billion in 2021. In each year from 2019 to 2021 OTAs increased the number of overnight stays in alternative accommodations in Europe. In 2021, bookings of alternative accommodations via OTAs generated 20.9 million additional nights.
