OTA vs AI: Reduce Travel Customer Acquisition Costs & Build Loyalty

The travel industry is entering a new phase. Online travel agencies (OTAs) built their growth on search engine visibility and paid acquisition. This model worked because users had to visit OTA platforms to compare options and complete bookings.

This model is starting to weaken.

Shares of Booking Holdings have fallen 25.5% since the beginning of 2026 and are now trading 31.8% below their 52-week high of $5,816 from July 2025 (according to Yahoo Finance). This decline reflects growing investor concern about future growth and the rising cost of acquiring customers.

At the same time, artificial intelligence (AI), specifically, large language models (LLMs) are changing how users search for travel. Instead of browsing multiple OTA websites, users can ask AI tools for recommendations and receive direct answers. This reduces the need to visit OTA platforms during the discovery phase.

This creates a structural challenge. OTAs depend on traffic to generate bookings. If fewer users visit their platforms, customer acquisition cost (CAC) becomes more expensive, margins decline, and long-term growth becomes harder to sustain.

This article explains why this shift is happening and how travel companies can reduce acquisition costs by focusing on retention, loyalty, and direct customer relationships.

Why Customer Acquisition Costs Are Rising

Customer acquisition has always been expensive in travel. OTAs like Booking.com, Expedia Group, and Airbnb dominate the market by buying traffic through Google Ads and other paid channels.

Some key challenges:

• High Google Ads costs: Keywords like “5-star hotel in Sardinia” or “all-inclusive vacation in Italy” can cost €5–€15 per click or more.

• Competitive OTA landscape: Multiple OTAs bid for the same search terms, driving costs higher.

• Low profitability per acquisition: According to PhocusWire, CAC often reaches 20–40% of booking margin, making paid campaigns unsustainable.

Paid traffic alone is no longer enough. Travel companies need retention strategies to reduce dependence on expensive ads.

How LLMs Are Changing Travel Search Behavior

Large language models, such as those developed by OpenAI, are transforming how travelers search for trips.

Instead of typing:

“Hotel in Rome”

Users now ask:

“Find me the best hotel in Rome for a couple, budget €2,000.”

Impact on travel businesses:

1. Fewer clicks on OTAs – LLMs provide direct recommendations instead of a list of links.

2. Shift to conversational discovery – Travelers ask detailed questions, which OTAs must adapt to.

3. New SEO requirements – Structured content and data are now essential to appear in AI-driven answers.

The Importance of Loyalty Programs and Mobile Apps

With rising CAC (customer acquistion cost) and AI-driven search, retaining customers is more difficult. Travel companies must invest in mobile platforms and loyalty programs.

1. Mobile-First Strategy

Mobile apps allow travel companies to:

• Communicate directly with users.

• Send personalized offers and notifications.

• Enable quick repeat bookings.

• Reduce dependency on OTAs.

OTAs have been investing heavily in mobile because apps increase repeat bookings and lifetime value.

2. Loyalty Programs That Work

Effective loyalty programs go beyond points. They provide real incentives for customers to return, such as:

• Exclusive member pricing.

• Personalized travel offers.

• Early access to new packages.

• VIP perks for frequent travelers.

3. Vouchers and Closed Offers

Vouchers are a cost-effective retention tool. Instead of paying €100 to Google for a new customer, companies can send €0 vouchers to existing customers, encouraging repeat bookings.

4. A Strong Digital Platform and Structured Data

Mobile apps and loyalty programs can only deliver results when supported by the right technology foundation. Travel companies need a digital platform that organizes product and customer data in a structured and consistent way.

Key elements include:

• A single source of truth for offers, products, and customer data.

• Structured and well-organized data that can be easily used across systems.

• API-first architecture that allows seamless integration with mobile apps, partners, and external platforms.

• Infrastructure that is compatible with AI-driven ecosystems and LLM-based search.

Platforms like Resabee Travel Booking System are designed to provide this foundation, enabling travel companies to scale personalization, automation, and distribution more effectively.

From Traffic Ownership to Customer Ownership

The future of travel marketing focuses on owning customers, not just traffic.

Companies that win in 2026 will have:

• Their own user data (preferences, history, demographics).

• Direct communication channels (email, mobile, SMS).

• Personalized offers and loyalty programs.

• Exclusive travel packages.

Owning the customer is the new competitive advantage, replacing the old model of buying traffic via Google Ads.

Practical Strategies for Travel Companies

1. Invest in a mobile-first platform – Optimize apps and mobile web for repeat bookings.

2. Develop advanced loyalty programs – Personalize offers, create member-only deals, and reward frequent travelers.

3. Leverage vouchers strategically – Use vouchers to reactivate past customers and encourage off-peak bookings.

4. Build a strong digital platform foundation – Centralize product and customer data, create a single source of truth, and use an API-first architecture to enable mobile apps, loyalty programs, and AI-driven distribution.

5. Optimize for LLM discovery – Structure content with rich data (schema, FAQs, pricing, location) to appear in AI recommendations.

6. Measure Customer Lifetime Value (CLV) – Compare ROI of retention campaigns vs paid acquisition to prioritize profitable strategies.

Key Takeaways

• Google Ads costs are rising faster than margins. Relying solely on paid acquisition is unsustainable.

• LLMs are changing search behavior and reducing traffic to traditional OTAs.

• Mobile apps, loyalty programs, and vouchers are the most effective tools to retain customers.

• Focus on customer ownership rather than traffic ownership to secure long-term growth.

Investing in these strategies now will reduce acquisition costs, increase repeat bookings, and future-proof your travel business.

Discover how Resabee Travel Tech solutions and products help travel businesses reduce CAC, boost loyalty, and automate bookings. Contact our sales team.