Online Travel Agencies (OTAs)

The Issue:

Online Travel Agencies (OTAs) are third party intermediaries that specialize in the sale of travel products to consumers through the internet. Some of the lesser known impacts of OTAs include:

  • Lost revenue through the Tourism Levy,
  • Reduced industry profitability and corporate tax revenue as travel that could be booked directly is sold at a higher commission through OTAs,
  • Disintermediation of service providers like hotels and marketing organizations like Travel Alberta from the traveller. OTAs ‘own’ the customers who book through them, as well as the massive amounts of data and marketing intelligence these consumers generate. OTAs use this data to sell multiple travel destinations to that same consumer.

 The AHLA recommends that the Government of Alberta:

  • Require OTAs to remit the Tourism Levy based on the total price paid by the consumer for the accommodation, not just on the wholesale rates paid to hotels by third party intermediaries like OTAs.
  • Prohibit rate parity clauses in contracts between hotels in Alberta and third party intermediaries like OTAs.
  • Take steps to maximize direct bookings through its own procurement policies and through Travel Alberta’s marketing initiatives.
View the AHLA’s position on Online Travel Agencies