How online travel agencies plan to win and retain customers

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The travel market in the United States continued its stellar recovery in 2022, with a total gross bookings increase of 51% over the prior year. Online travel agencies comprised just over one-fifth of the total U.S. market during this period, according to new Phocuswright research included in its U.S. Online Travel Agency Market Report 2022-2026.  

While OTAs like Hopper and HotelTonight have always been app-first or app-only, mobile was just one part of the puzzle for the larger OTAs. But several factors, among them reducing their marketing spend and their reliance on Google, along with their need to acquire first-party data, have made direct customer interaction via their own sites and apps increasingly important.

The larger OTAs like Expedia and Booking have also emphasized the importance of their apps as a channel to win and retain customers for the long term. Further underlining the importance of apps, according to Expedia its app users drive 2.5 times the gross profit and repeat business over an 18-month period compared with a non-app user. At the end of 2022, Expedia had 60% more active app users than any prior year. Booking saw about 45% of its room nights booked through its app in 2022, a 13 percentage point increase over 2019.

Forty-seven percent of OTA gross bookings were booked via mobile in 2022, nearly 10 points higher than in 2019 (see figure below).

Mobile share will continue to grow as the large OTAs continue their push to get customers to transact on their apps. In 2023, more than half of OTA gross bookings are projected to come from mobile.

Learn more!

Phocuswright’s U.S. Online Travel Agency Market Report 2022-2026 provides a comprehensive view of the U.S. online travel agency channel, including detailed market sizing and projections through 2026, distribution trends, key developments and more. 

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