Travel Terms You Need to Know: Online Travel Agency (OTA)

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Hey, I’m Scott, founder
of Scott’s Cheap Flights. You know, I am obsessed with cheap flights and over the years, I would like to think I’ve learned a thing or
two about booking airfare. So in this video, I want
to explain what OTAs are So in this video, I want
to explain what OTAs are and how they can help you
get some cheap flights. So an OTA, which stands for
an Online Travel Agency, is a company that sells
you flights online. They’re the middlemen between
airlines and consumers. You’ve probably heard of some of the big ones,
Priceline, Orbitz, Expedia. You know, these guys have
been in business for decades and they sell not just flights, but car rentals and hotels as well. There’s also hundreds if not thousands of other, smaller OTAs too. OTAs work by plugging in to what’s called a Global
Distribution System, which is a fancy name for the marketplace where airlines tell distributors what they want to charge
for their flights. The OTA then turns around and shows that price to
travelers, like you and me. So when you buy a ticket from an OTA, there’s usually a little bit of a delay between when you click purchase and when that ticket actually
shows up in your inbox. The reason why is because,
unlike the airlines, the OTAs don’t actually
have the tickets they sell. Instead, they’re acting as the middle man, connecting the customers
with the airlines, and they take a small commission from the airlines in the process. The main benefit of using an OTA is that the price might be
cheaper than booking directly with an airline. Unlike most middlemen, OTAs
don’t actually jack up the price they tend to offer the
same price as the airline, sometimes even lower than
what you’ll find directly with an airline. How are the OTAs able
to offer cheaper fares than the airlines? There are a few different reasons why. They might be passing on
the commission as savings to the consumer, they might
be getting a specific discount from the airlines, they might
actually be cutting cost by, for instance, skimping on
customer support or charging some big fees for changing
or canceling your ticket. Or, sometimes they even
actually sell flights at a loss, hoping that you’ll then
book maybe a hotel room or a car rental with them, items that tend to have
big commissions for them. Some OTAs recoup the money
that they pass on to you in savings by maybe
charging some egregious fees or really skimping on customer support. So that’s something to be mindful of before you book with an OTA. This means, you know, if you think that there might be some
changes in your future or you think you’re not 100%
sure on taking this flight, it might be worth it to pay a
little more to book directly. If you book directly with
an airline, you’re covered by a Federal Department of
Transportation regulation called the 24-hour rule, which means that you
can cancel your ticket within 24 hours of booking and
not be charged any penalty. But that’s only if you book
directly with an airline, not through an OTA. So what’s best, booking
with an OTA or directly with an airline? There’s a few cut and dry situations. You know, if the price is
the same booking directly with the airline versus
booking through an OTA, there’s almost never a reason
to book through the OTA. But, if the OTA price is
like $500 lower than booking with the airline, of course
the OTA’s the way to go. But for more gray area situations, it mostly comes down to personal comfort. So here’s some things to consider. How certain are you to
take this specific flight? Are the potential savings
of an OTA worth it to you? Is this a Mistake Fare that’s
only available through an OTA or can you book directly with the airline? So, to wrap up, when the
price is the same booking through an OTA as booking
directly with an airline, there’s not much reason
to go through the OTA. If it’s a huge price difference,
you might want to do it. And remember, if you book
through an OTA you’re not covered under the 24-hour rule,
whereas if you book directly with an airline you have
24 hours after you book that you can cancel it
without any penalty. You can also check out our other videos, subscribe to our YouTube channel, and check out the links below. And if you wanna save big on airfare, join Scott’s Cheap Flights. You know, since 2015 we have
helped millions of people be able to travel and take flights that they never thought they
would be able to afford. Our members, you know, save an average of like $550 per ticket. So go ahead and follow the link below, sign up for Scott’s Cheap Flights, and it would be our honor to be able to send you some great deals soon. Thanks everybody for watchin’.
Talk to y’all next time!

 

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