A Friendly Take on the Current OTA Landscape — Without Sugarcoating the Realities. After years of impressive momentum, the U.S. online travel agency (OTA) market is showing signs of leveling off.

Not all reservations are created equal — do you know their origin?

HMS, Inc. has been recognized by Top Third-Party Management Companies 2023 for its innovative Revenue Capture solutions and improved guest experiences.

After years of impressive momentum, the U.S. online travel agency (OTA) market is showing signs of leveling off. While global expansion continues to push the broader market upward, the domestic story is a bit more layered. In 2024, U.S. OTA sales reached $108.5 billion—still growing, but at a gentler pace than we've seen in the past. Market share remains stable, yet early shifts—especially toward supplier-direct bookings—suggest changes are coming by 2028.

Expedia is navigating some strong headwinds, particularly as the U.S. market softens and competition heats up.

Booking.com seems better positioned for now, but even they aren't entirely shielded from the evolving landscape.

Hotel bookings continue to anchor OTA profitability, but that strength may not be as durable as it once was. With average daily rates flattening and demand cooling, the spotlight is now on fresh growth opportunities creating incremental revenue—everything from excursions and destination and dynamic packaging to innovative platforms represented by Phunware's Hospitality Solutions.

For over 16 years, Phunware (NASDAQ: PHUN) has been the innovator in the mobile experience platform, guiding customers, patients, students, and now Hotel & Resort guests through every step of their journey with your Hotel. We have helped transform the guest journey with a branded mobile app that does far more than manage reservations. From pre-arrival to check-out, our context-aware technology keeps guests informed, engaged, and delighted with real-time messaging, in-property wayfinding, personalized offers, and behavior-driven recommendations.

And the results speak for themselves.

Properties like Wailea Beach Resort have seen 30% of guests discover new experiences directly through the app. Features like timely upsell prompts—whether it's a spa appointment, cabana rental, or late check-out—are delivered at just the right moment to drive ancillary revenue, all while enhancing the guest's stay.

Phunware's AI-powered tools personalize engagement and automate promotions based on location and behavior. This frees staff to focus on high-touch service, leading to better reviews, stronger satisfaction scores, and loyal guests who return again and again.

The reality is: technology has become the new battleground—and Phunware is leading the charge with agentic AI and generative tools that are reshaping how travel is sold and serviced. These aren't gimmicks—they're innovative solutions that restore the kind of personalized service we used to get from brick-and-mortar travel agencies.

To put it in perspective, from 1992 to 2025, nearly 25,000 traditional travel agencies closed, leaving just 7,200 operating today. That's a staggering drop. Think back: when was the last time you walked into a travel agency, were greeted with a smile and a beverage, and guided through a sea of brochures by someone who'd been to the places they were recommending? That was personalized, immersive travel planning—bespoke before bespoke was trendy.

While B2B strategies like embedded OTA inventory are gaining ground, true innovation on the consumer side—like curated combination packages—is still catching up, representing only a fraction of total bookings.

Phunware doesn't aim to bring back the past—but we do believe in keeping the heart of hospitality alive. Whether it's helping destinations deliver exceptional experiences or giving travelers the digital tools to plan smarter and enjoy more, we haven't forgotten what guests want: authentic communication, intuitive service, and a trip that feels tailored just for them.

Different travelers have different expectations—and we honor all of them:

Gen Z

They've grown up digital, but they crave trust, authenticity, and immersive stories they can share. They're skeptical of gimmicks, but respond to well-crafted, curated experiences with real value.

Gen X

Busy, discerning, and loyal, they remember (perhaps on family vacations) the golden age of travel agencies and still appreciate personal service. They want concierge-level planning, time-saving tools, and the peace of mind that comes from knowing someone has their back—before, during, and after their trip.

At Phunware, we blend the best of both worlds. We're not just building apps—we're helping hospitality brands and destinations deliver seamless, memorable journeys that resonate with every generation of traveler, with the added result of increasing incremental & ancillary revenue, and achieving out-of-the-park guest satisfaction scores.