An online travel agency (OTA) is a website or app that searches flights, hotels, trains, buses and holidays from many companies and sells them to you. Most Indian travellers book at least part of a trip on one. MakeMyTrip, ixigo and Cleartrip are the best known in India.
The OTA's real product is search. When you search for a flight, the OTA does not look in its own list of seats, because it owns none. It sends your question to a global distribution system (GDS), and to some airlines directly through NDC, the airlines' newer way of selling. For hotels, it asks each hotel's channel manager for the price and the rooms still free. Hundreds of answers come back in a few seconds. The OTA sorts them, removes duplicates and shows you one list.
Prices change by the minute. Asking every airline again for every search would be slow and expensive. So the OTA saves recent answers for a short time. This saved copy is called a cache. A cache makes search fast, but its prices can be out of date. So the OTA checks the price again with the airline or the hotel before it takes your money.
Take, for example, a couple in Kolkata booking four days in Gangtok. They choose a flight to Bagdogra, the nearest airport, shown at ₹5,400 each. At the next step, the OTA checks the fare with the airline, and the fare is now ₹5,650. The app shows a message that the price has changed. They accept it. Then they choose a hotel in Gangtok for ₹3,200 a night, for three nights. The OTA asks the hotel's channel manager to hold the room. Before they pay, the app offers travel insurance for a few hundred rupees. The payment gateway then collects ₹20,900 by UPI, and both bookings are confirmed.
The OTA earns in several ways. Hotels pay it a commission, often 15–20% of the room price. Airlines pay a much smaller amount, or nothing, so the OTA may add a convenience fee to each flight ticket. It also earns from ads and from insurance.
An OTA is a marketplace, not a reseller. It sells seats and rooms on behalf of their owners, and it does not buy them in advance. The difference is explained in marketplace vs inventory model. Because the same room is on sale on many sites at once, every booking must close that room on every site. This is multichannel inventory management.
AI models are now changing how trips are searched. An AI trip planner lets you describe a trip in a sentence instead of filling in a form, and then books it through an OTA.