OTAs: Game-changer or profit killer? Travel experts weigh in at ASEAN Tourism Forum
OTAs: Game-changer or profit killer? Travel experts weigh in at ASEAN Tourism Forum
There’s no denying that Online Travel Agencies (OTAs) have reshaped the travel industry, serving as both an enabler and a challenge for hotels, airlines, and travellers. At a recent panel discussion at the ASEAN Tourism Forum 2025, moderated by Hannah Pearson, Director of Pear Anderson, key industry leaders weighed in on the complicated role of OTAs in tourism – are these giant platforms friend or foe?
There’s no right answer, rather the value proposition of OTAs
Yang Li, Head of Public Affairs APAC at Booking.com, highlighted the varying degrees of importance OTAs hold for different hotel partners. While larger hotel chains have strong direct online channels, smaller boutique hotels struggle with visibility. “It would be remiss of me, as a representative of an OTA, to say we’re definitely pivotal. It’s a complicated question, because as a business model, I think the complete answer is that we’re different for different hotel partners. We’re deferring levels of importance,” he explained. From a consumer perspective, OTAs have become indispensable for price comparisons and bookings. “We have sort of taken advantage of that wave of going digital. Everything is being done online, on the internet.”
Nadia Omer, CEO of AirAsia MOVE, reinforced this sentiment, emphasising that OTAs arose to fill gaps in the industry. “If all the needs were fulfilled, OTAs would never have even been born,” she stated. According to her, price comparison is one of the biggest drivers behind travellers’ shift to OTAs. “Rather than going by each site of each airline, their journey is, ‘This is my schedule. What are the options in terms of price comparisons and scheduling?’”
Does everyone really profit from OTAs?
Despite the benefits, OTAs present several challenges for hoteliers, particularly small-scale operators. Dr. Sri Ganesh Michiel, National President of the Malaysia Budget & Business Hotel Association (MyBHA), pointed out that while OTAs initially promised business, they did not guarantee profitability. “What is happening now is that product owners realize they are having customers, but they are not having profits.”
He also raised concerns about high commission rates, restrictive contracts, lack of direct control over guest interactions, and the listing of unlicensed properties. “The worst part, which is the challenge of the current industry, is the listing of unlicensed properties in OTAs. The OTAs are based overseas. They have no knowledge of the country’s law.” He cited Booking.com’s recent challenges with fraudulent listings as an example.
However, he acknowledged that collaboration with OTAs has led to progress, particularly in regulatory compliance. “Working together has actually produced some very good outcomes, not only on the scams front but also on issues like the tourism tax in Malaysia.”
Yang Li responded to these concerns, stating that Booking.com does not prioritise large hotel chains over smaller properties. “If individuals are looking for hotels that are off the beaten path, we populate that. We do not put, say, the Hiltons or the Marriotts as the consistent top three.” He also mentioned an upcoming initiative to support small and medium-sized accommodations. “We’ve just started to develop a fund, rolling out later this year, to assist small, medium accommodation providers on hospitality practices.”
From right: Yang Li, Head of Public Affairs APAC, Booking.com, Nadia Omer, CEO, AirAsia MOVE, Dr Sri Ganesh Michiel, National President, Malaysia Budget & Business Hotel Association (MyBHA). Moderator (Left): Hannah Pearson, Director Pear Anderson
The many different shapes and sizes of today’s OTAs
AirAsia MOVE operates differently from traditional OTAs, focusing on budget travel and two- to three-star hotels. “For our travellers, we want to get them the best deals in budget hotels. It’s win-win,” said Omer. Unlike larger OTAs, AirAsia MOVE leverages data-sharing between airlines and hotels. “Wherever I am sourcing directly from the hotel, they will have the customer’s phone number and real email address. That is not the practice today with many of the bigger players.”
Regarding AirAsia’s expansion into the OTA space, Omer explained that it aligns with the airline’s core philosophy of affordability. “When Tony [Fernandes] created AirAsia, the idea was to create a budget airline that makes money while also being a win-win for the traveller, the company, and the country.” She added that owning an OTA allows AirAsia to protect airlines’ profitability, avoiding a scenario where flights are used as a loss leader while margins are made through hotel bookings. “We are coming in as the champion for the airlines. It is existential. Please work with us, and you will see the difference.”
Omer highlighted the distinct positioning of AirAsia MOVE as a budget travel OTA, emphasizing its focus on affordable and locally immersive experiences. “There’s no point in just saving money on the ticket if the full trip is costing you a lot, and nobody is really specialising in this area,” Omer explained. AirAsia MOVE aims to bridge this gap by curating budget travel packages that include low-cost flights, budget hotels, and local food experiences.
Additionally, MOVE has begun experimenting with travel experiences, such as concert and festival bundles, to cater to budget-conscious travellers who still seek entertainment, such as Malaysia’s Rainforest Festival and Thailand’s Big Mountain Festival, which Omer says are affordable and culturally rich but often underpromoted across Southeast Asia.
New contenders, super apps and regulatory challenges
Omer contrasted the role of a super app with an OTA, explaining that while super apps like WeChat and Grab emerged as daily-use platforms incorporating multiple services, MOVE remains centered on travel. “When we talk to tourism boards and ministers, we emphasise that budget travellers touch more households – small hotels, street vendors – ensuring that tourism revenues penetrate deeper into society,” she added.
Another pressing issue she raised was pricing practices, particularly the risk of market monopolization by larger digital travel companies. “Companies with deep pockets often enter markets, drop prices aggressively to push out competition, and then raise prices later. We saw this happen with Grab’s pricing strategy. If we don’t address this, only the big players will dominate, and budget travellers will ultimately lose out,” Omer cautioned.
Dr. Michiel called for stricter regulations governing OTAs, arguing that traditional hotels and travel agencies are subject to numerous licensing and compliance requirements, whereas online platforms often operate with fewer restrictions. “Any business you operate in our country, or any other country needs to have a business license. That’s what we are advocating for,” he stated. He also emphasised the need for transparency regarding commission structures and consumer reviews, urging that platforms ensure authenticity in ratings and feedback.
He pointed out that some OTAs have taken advantage of hoteliers’ lack of knowledge, leading to unfair practices. “A lot of middlemen enter the picture, creating complexity and even legal disputes. We need clear regulations to protect both product owners and consumers. Travellers assume that their booking is guaranteed, but often they face issues upon arrival,” he warned.
Yang Li of Booking.com responded to these concerns, stressing that established OTAs like Booking.com adhere to strict legal frameworks across the markets they operate in. “We’ve been around for 28 years, and we could not have reached where we are today without complying with regulations. We actively cooperate with government authorities and self-police against manipulative or bullying tactics by certain players in the market,” he said.
Ultimately, the panelists agreed on the need for ongoing discussions between OTAs, hoteliers, and regulators to ensure fair business practices while fostering innovation in travel. While OTAs provide undeniable benefits in terms of reach and convenience, their operations must align with national regulations to ensure sustainable and equitable growth in the tourism sector.