 Traveling today is pretty neat. Ever think of returning to the good old days when you had to come to travel agency to book your flight? Well, me neither. Doing things online is extremely convenient. And all thanks to the growing online travel agency market. Let's look under the hood of an OTA and learn what does it take to build one. My name is Andrey Chebotarov and I am travel technology competence leader at Eltexav. And here is a brief introduction into the business of online travel agencies. Why are people so drawn to using online travel agencies instead of going directly to hotels or airlines website? Well, the answer is simple. Be choice. Travelers like having options, comparing prices, filtering search results. It's the easiest way to plan a trip without visiting dozens of websites. OTAs exist in all shapes and sizes. Some, like booking.com, have a huge inventory of hotels. And others, like Expedia, combined flights, hotels serving cars on the same website. And there are many more niche and specific OTAs that make up this diverse market. Any successful OTA is built on four pillars. First is the inventory. The information about all the flights, hotels, cars can come to the website from the different sources. From the hotels or airlines directly. From consolidators, wholesalers and many others. An OTA should contact all the providers, negotiate exclusive rates and conditions, which give the competitive advantage of one OTA over another. Second is compliance and accreditation. Selling flights in hotels online is not a regular e-commerce business. In most cases, to become a travel agency, a business needs an accreditation from AYATA and contracts with global distribution systems, GDSs. These organizations review your industry experience, financial and staff competence criteria and also provide trainings. A certificate will make other market players recognize you as a partner and allow you to sell flights and perform ticketing on their behalf. You should also have a number of trained travel agents to provide first line of support and do post booking service. The third pillar is effective marketing. To survive in highly competitive OTA market you have to put effort into obtaining customers. You run marketing activities including e-mail campaigns, interacting with customers, integrating with meta-search engine, building an SEO strategy and others. Fulfilling these tasks effectively helps people find your website and consistently book there. And finally, we have technologies. These are software solutions that automate OTA workflows to reap the biggest revenue by delivering the best customer experience. The main thing that OTA needs is a search and booking engine. A booking engine is the heart of online travel agency software which integrates with GDSs, wholesalers and other inventory providers. It uses a technology called API to connect your software with providers. A booking engine checks availability, aggregates data, runs entire workflow from requesting reservations on the supplier side to ticketing and users and processes payments. This software would also find the cheapest and most relevant options for the customer. The engine does that by using complex algorithms which decide what inventory provider to reach and what search parameters to use to find the best price. We will have a video entirely about booking engines up soon. Another important module is used to calculate and assign markup and service fee for each deal. It's called a commission engine. This is your main revenue management tool. You have to adjust prices for rooms or flights you offer to make the most profit and also to provide competitive options at the same time. A commission engine usually takes into account lots of different factors from demand to competitors' prices. You can use traditional rule-based systems that determine price in advance or even apply machine learning to maximize revenue. Next, any online business needs a back office and OTA is no exception. This is your deck house where agents and managers control how business operates. View all past and current bookings, store customer data, create and change business rules and of course access dashboards and reports. Then a recommendation engine. This is a similar technology that Netflix or Amazon use to suggest shows or products you may like. The system gathers users' metadata, their actions, past searches and even more to predict what they want. Just simple segmentation into business or leisure travelers can significantly improve customer experience. They spend less time searching, work faster and feel more confident about their choice. Machine learning has reached amazing results in content personalization by predicting what a user may want even without knowing much about them. Next up is a dynamic packaging engine. Packages or bundles are a combination of different travel products that both is one. For example, hotels stay, plus rental car, plus flights. Bundles can be cheaper and save time when people are planning the trip. An OTA is not a traditional walking agency where agent can take time to create custom tour to you. Everything should happen quickly. So a dynamic packaging engine creates bundles automatically. What makes these packages dynamic is how they are priced. The system determines combined price for several travel products, which is usually cheaper than buying them separately. And that's it for today. In the next video I'll explain how the heart of an OTA is booking engine works. Please make sure to subscribe and have a nice day.