Booking Holdings and Expedia Group sold over $300 billion of travel in 2025. Here is how OTA commission and merchant models actually work, how metasearch differs, and when booking direct beats the middleman.
Cover image: flight search running on a laptop — photo by Suyash.dwivedi, CC BY-SA 3.0, via Wikimedia Commons.
Two companies sell most of the world's online travel. Booking Holdings, the US-listed parent of Booking.com, Priceline, Agoda, Kayak and OpenTable, reported $186.1 billion in gross bookings for 2025, up 12% year on year, with revenue of $26.9 billion and more than 1.2 billion room nights sold, according to its fourth-quarter earnings release. Expedia Group, which owns Expedia, Hotels.com and Vrbo, booked $119.6 billion in the same year on revenue of $14.7 billion and 415.4 million room nights. Between them, that is over $300 billion of travel a year flowing through two corporate umbrellas.
The business model underneath is simple: online travel agencies (OTAs) do not own hotels or aircraft. They take a commission of roughly 10% to 30% on each booking, or buy inventory at a net rate and resell it with a margin. Metasearch sites such as Google Flights, Kayak and Skyscanner are different again: they sell no travel at all, earning per-click referral fees instead. Understanding which model you are looking at explains why the same hotel room can show five different prices.
Who owns the big online travel agency brands?
What looks like a crowded marketplace is largely two portfolios. Booking Holdings runs Booking.com (its dominant accommodation brand, strongest in Europe), Priceline (US-focused), Agoda (Asia-Pacific), Kayak (metasearch) and OpenTable (dining). Expedia Group runs the Expedia full-service brand, Hotels.com and the holiday-rental platform Vrbo, plus a large B2B arm that quietly powers travel booking for airlines, banks and loyalty programmes.
| Full-year 2025 | Booking Holdings | Expedia Group |
|---|---|---|
| Gross bookings | $186.1bn (+12%) | $119.6bn (+8%) |
| Revenue | $26.9bn (+13%) | $14.7bn (+8%) |
| Room nights | 1.2bn+ (+8%) | 415.4m (+8%) |
| Key consumer brands | Booking.com, Priceline, Agoda, Kayak, OpenTable | Expedia, Hotels.com, Vrbo |
| Historic core model | Agency (pay at hotel) | Merchant (pay OTA upfront) |
Note the ratio in those figures: revenue is roughly 12% to 14% of gross bookings at both groups. That is the effective take rate, the clearest public evidence of what intermediation actually costs the industry.
How do OTAs make money? Agency vs merchant model
OTAs earn through two main mechanisms. Under the agency model, historically Booking.com's default, the traveller pays the hotel at check-out and the hotel then remits a commission to the OTA. Hotel-tech firm Cloudbeds puts typical commissions at 10% to 25% for Booking.com (averaging around 15%) and 15% to 30% for Expedia, varying by market, property type and cancellation policy.
Under the merchant model, Expedia's traditional approach, the OTA takes your payment at the time of booking, contracts a net rate with the hotel, and keeps the difference. The hotel is paid after the stay. Merchant transactions give OTAs float, control of the customer relationship and the ability to bundle: packaging an opaque flight-plus-hotel price is how OTAs can discount without technically breaking a hotel's published rate. Both giants now run hybrids, and Booking.com's fast-growing payments platform has pushed a majority of its revenue into the merchant column.
Flights are the awkward exception. Airline tickets carry thin or zero commissions, so OTAs sell them close to cost, often through the same GDS pipes and IATA settlement systems covered in the guide to how airline ticketing really works, mainly to feed higher-margin hotel and package attachment.
What is the difference between metasearch and an OTA?
A metasearch engine compares prices across many sellers but hands you off to complete the booking elsewhere. The commercial models differ sharply:
- Kayak (owned by Booking Holdings) and Skyscanner (owned by China's Trip.com Group) earn mainly cost-per-click referral fees: airlines, hotels and OTAs pay each time you click through, typically with cost-per-acquisition deals layered on top.
- Google Flights stopped charging airlines and OTAs for booking referral links in 2020, and shut its "Book on Google" checkout for hotels after low uptake. Google monetises travel through its wider advertising machine rather than per-ticket fees.
- Trivago (majority-owned by Expedia Group) auctions hotel clicks the same way, meaning even the comparison layer is largely owned by the two OTA groups it compares.
Practical upshot: metasearch is the better price-discovery tool, especially for flights, where timing matters as much as channel, as the booking-window data in the best time to book flights guide shows. But the price you click is not always the price you get once currency, taxes and fare rules resolve on the seller's site.
Why does the same hotel room have five different prices?
Because five different contracts can sit behind one room. Wholesale "bedbank" rates sold B2B leak onto consumer sites; merchant-model OTAs repackage net rates; member-only and mobile-only discounts sit behind logins; and hotels flex their own direct rates against everything else, using the revenue-management logic detailed in how hotel room pricing works.
Regulators have widened the spread further. The European Commission designated Booking.com a gatekeeper under the Digital Markets Act in May 2024, forcing it to drop rate-parity clauses that stopped hotels undercutting it elsewhere. Spain's competition authority, the CNMC, fined Booking €413 million in July 2024 for abuses including those parity terms. With parity clauses abolished across the EEA, hotels can now legally publish cheaper prices on their own websites, and increasingly do.
Is it better to book direct or through an OTA?
It depends on the product. For flights, direct usually wins: prices are typically identical or lower, schedule changes and refunds are far easier without an intermediary in the chain, and airlines are steering their best NDC fares to their own channels. For hotels, the gap has narrowed: OTA loyalty schemes (Genius, One Key) discount hard, but direct bookers get room-upgrade priority, loyalty points and easier changes, and post-DMA a matching or better direct rate is often one email away. A companion piece on booking hotels direct versus via an OTA unpacks the hotel case in detail. Where OTAs genuinely earn their commission is in aggregation: comparing independent properties, unfamiliar markets and package pricing that no single supplier's website can replicate.
Frequently asked questions
Does booking through an OTA cost me more than booking direct?
Not automatically. The commission is paid by the hotel, not added to your bill, and OTA member rates can beat the public direct price. But since EU parity clauses fell away in 2024, hotels are increasingly free to undercut OTAs on their own sites, so compare both before paying.
Are Booking.com, Priceline, Agoda and Kayak really the same company?
Yes. All four, plus OpenTable, belong to Booking Holdings, which reported $186.1 billion in gross bookings for 2025. Expedia, Hotels.com and Vrbo likewise all sit under Expedia Group, and Trivago is majority-owned by Expedia too.
Who handles the problem if my OTA-booked flight is cancelled?
The airline must operate or refund the flight, but any rebooking or refund generally has to be processed back through the OTA that issued the ticket, which can add days to the process. That servicing friction is the strongest argument for booking flights direct, even when prices match.
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