Most founders who want to open an online travel agency start by asking a software house for a custom booking platform: six to nine months of work, and no bookings until it ships.
That order is backwards.
How to start a travel agency online in 2026 comes down to a niche you can own, the licenses your market requires and supply contracts that give you rooms and fares to sell. The platform can be rented for the first year or two.
What is an online travel agency (OTA)?
An online travel agency sells other companies' travel: hotel rooms, flights, car hire, activities, or packages that combine them.
The traveler searches, compares and pays on the OTA's site, and the hotel or airline delivers the trip. The agency owns no rooms or seats. Its business is the website, the booking and the customer who comes back next year.
Booking.com and Expedia are the large generic examples. Most OTAs are small and specialized: ski chalets, dive trips, accessible travel, school groups.
An online travel agent business earns its money in one of two ways, and the choice shapes cash flow, risk and the licenses you need.
- On the agency model the traveler pays the hotel, usually at the property, and the hotel pays you a commission afterwards. Little money passes through your hands, and you have little control over the price.
- On the merchant model you take the traveler's payment, pay the supplier a net rate and keep the difference. You become the merchant of record, liable for refunds and disputes, and you hold customer money until the trip.
The industry has moved toward the merchant model.
In Booking Holdings' 2025 annual report, 70% of gross bookings were merchant bookings, up from 63% a year earlier. Taking the payment gives an agency more control over price and over the customer, and more responsibility with it; step 6 below covers what that means in practice.
Is an online travel agency still worth starting in 2026?
Yes, if you pick a corner the two giants serve badly.
The generic market belongs to them. Booking Holdings sold 1.235 billion room nights in 2025 on $186 billion of gross bookings, and Expedia Group added $120 billion.
In Europe, the hotel association HOTREC's 2026 distribution study found that OTAs delivered 29.9% of hotel overnights in 2025, and that Booking Holdings and Expedia Group together took 85.4% of those OTA bookings.
Competing with them on general hotel search is a contest of marketing budgets, and a newcomer loses it.
A niche changes the arithmetic. A narrower audience is cheaper to reach, a specialist can sell products the big sites list badly (a chalet with catering, a liveaboard dive boat, a step-free room that really is step-free), and suppliers in a niche often prefer a partner who understands what they sell.
The market is large enough for a small slice of it to be a business. Phocuswright, a travel research firm, puts US OTA gross bookings at $100.3 billion in 2025, one fifth of all US travel bookings, with hotels making up 63% of it.
Starting a travel agency from home with a host agency
Many people who look up how to start a travel agency from home want to sell travel as an advisor, without running a website that books it. For them a host agency is the shorter route.
ASTA's bylaws describe a host as a firm whose business is "the provision of support services for compensation to a network of non-employee travel advisors and travel agencies through an independent contractor relationship".
The advisor sells under the host's registrations and supplier contracts and shares the commission. It is a lighter way into the trade: no website to run, no supplier certification, and someone else's bonds. State law recognizes the arrangement: Washington's seller of travel law exempts outside agents who sell under a registered seller's name while that seller processes all the money.
The rest of this guide is about the other route, an OTA, where the website does the selling and you hold the supplier contracts, the payments and the customer.
How to start a travel agency online, step by step
The steps below follow the order in which the decisions depend on each other.
Licenses and supply decide what you can legally sell and at what margin, so they come before any design work. The website comes fifth.
1. Choose a niche you can describe in one sentence
A useful niche names the customer, the product and the season: family ski holidays in the French Alps with childcare booked in. A description like that tells you which suppliers to call and which searches to win.
Before going further, check three things: that people search for it, that the big OTAs list it poorly, and that the suppliers will talk to a newcomer. If one of them fails, adjusting the niche now costs far less than adjusting it after the site is built.
2. Write an online travel agency business plan around the margin
An online travel agency business plan depends on one line: what you keep from each booking after paying for the traffic that brought it.
The rest of the plan follows from that number. Work these out first:
- Your margin per booking, either a commission share from the supplier or a markup on a net rate. For scale, WebBeds, one of the largest bedbanks, reported a 6.8% margin on A$5.8 billion of total transaction value in the year to March 2026.
- Your cost per booking from paid search and metasearch (step 7).
- Cancellation and dispute rates, which land on you directly on the merchant model.
- The months of runway you need until repeat customers and organic search carry part of the acquisition cost.
If the margin does not cover the acquisition cost at a realistic conversion rate, no booking platform will fix it, rented or custom.
3. Register the business and get the travel licenses
The licenses depend on where your customers are as well as where you are, and on whether you sell packages or single services.
The table in the next section covers the EU, the UK and the four US states with seller of travel laws. Budget for insolvency protection: in most markets, money you take for a trip you have not yet delivered has to be bonded, insured or held in trust.
4. Sign supply contracts
Supply is where a new agency spends most of its first months.
Hotel chains and airlines rarely sign direct contracts with a newcomer, so most OTAs begin with wholesalers: bedbanks for hotels, a flight API or a host for air, and specialist operators for the niche product itself. The inventory section below explains each source.
5. Choose the platform, and rent it first
A white label travel portal or a booking API gets you live in weeks, and the build or buy section below sets out when that stops being enough.
Whichever you choose, read the contract before you sign it. Check who owns the customer data, the search-to-book limits, who is merchant of record, and whether you can leave with your domain and booking history.
6. Set up payments
On the merchant model you take card payments, so the PCI DSS security standard applies.
Version 4.0.1 is current, and 51 requirements that had been future-dated became mandatory on 31 March 2025. A payment provider's hosted checkout keeps most of that scope off your servers, which makes it the sensible default for a small agency.
Selling to travelers in Europe also means strong customer authentication, the two-factor check on card payments that PSD2 requires. If you rent the platform, ask whether the vendor will charge the traveler for you: Booking.com's Demand API offers a model where Booking.com charges the card and settles with suppliers.
7. Plan marketing and the cost per booking
Paid traffic is the largest running cost for most OTAs.
Google Hotel Ads sells clicks either at a fixed bid or as a percentage of the nightly price: a 1.4% bid on a $100 night is a $1.40 click. Work back from your conversion rate to a cost per booking and set it against the margin from step 2.
Content and organic search are slower and cheaper, and they suit a niche.
The specialist who writes the most useful guide to step-free hotels in Lisbon can rank for it against sites a thousand times larger. Content takes months to show results, so start writing before launch.
8. Decide how you handle customer support
Travelers call when something goes wrong, often at night and from another time zone.
Decide before launch who answers, in which hours, and what an agent may refund without asking. A few rules written down before the first booking save a lot of improvised refunds later.
The revised EU package travel rules described below also set a deadline of 60 days for answering complaints.
What it costs to launch
Most launch costs are registrations and bonds, which you pay before the first booking, and supplier and advertising fees, which grow with sales. The published figures, as of October 2026:
| Item | Published cost | How it scales |
|---|---|---|
| California seller of travel registration | $100 a year per location | Fixed |
| Florida seller of travel registration | $300 a year, plus a bond of up to $25,000 | Fixed |
| Washington seller of travel registration | $222, plus a trust account or a bond | Bond rises with Washington revenue |
| Hawaii travel agency registration | $215 or $146, depending on the year | Fixed |
| UK Standard ATOL | £2,606 application fee and a bond of 15% of licensable revenue, at least £50,000 | Bond rises with flight revenue |
| UK Small Business ATOL | £1,538 application fee and a £50,000 minimum bond, for up to 500 passengers and £1m a year | Fixed, within the cap |
| IATAN (US industry code) | $280 to apply, $120 a year | Fixed |
| Hotelbeds API | Registration and certification at no charge; you earn on net rates | Per booking |
| LiteAPI hotel bookings | Core booking flow free at a reasonable look-to-book ratio | Per booking, through your markup |
| Duffel flights | $3 per order, plus fees on some content and ancillaries | Per booking |
| White label booking platform | Usually on request | Ask whether it is per booking, per month or both |
| Google Hotel Ads | Per click, as a fixed bid or a share of the nightly price; no minimum spend is published | Per click |
| PCI DSS | A self-assessment, SAQ A, if a payment provider's hosted page handles all card data | Staff time, once a year |
The bonds are the expensive part, and they are cash you tie up rather than spend.
A founder who holds their own Standard or Small Business ATOL needs at least £50,000 in bond capacity before selling a single flight package, which is one more reason to start with hotels and activities and add flights through a partner who holds the license.
EU insolvency protection has no single price: it depends on the country and on the guarantee fund or insurer you use.
A 90-day launch checklist
Twelve steps over roughly three months, in the order that keeps you from building before you can legally sell:
- Write the niche in one sentence and build the margin model from step 2, with a target cost per booking.
- Register the company and check every market you will sell into against the license table below; start any bond or trust account applications early.
- Apply to one hotel source (bedbank evaluation keys or an Expedia partner application) and, if you will sell flights, open a Duffel test account or talk to a host agency.
- Choose the platform after reading its terms on data ownership, look-to-book limits, merchant of record and exit.
- Build the booking flow on test keys, with a live price check before payment.
- Set up a hosted payment page that keeps you eligible for SAQ A, with strong customer authentication for European cards.
- Write the overbooking and refund policy and the support hours, and put them on the site.
- Add a consent banner for non-essential cookies and an email opt-in that meets the rules described below.
- Pass supplier certification or site review, including the live test booking and cancellation.
- Publish the first content pages your niche searches for.
- Set up Hotel Center and a price feed, then start a capped paid campaign and compare its cost per booking with the margin.
- After 30 days of live bookings, review margin, cancellations and support load before raising the budget.
Travel agency license requirements by market
Whether you need a travel agent license, a registration or a bond depends on what you sell and to whom.
The triggers that come up in every market are selling packages (two or more travel services for the same trip), selling flights, and taking customer money before the trip.
| Market | What triggers it | What you need | Where to check |
|---|---|---|---|
| EU, today | Organizing packages, or facilitating linked travel arrangements | Security for every payment for services not yet performed, plus repatriation where transport is included (Directive 2015/2302, Art. 17 and 19); registration rules vary by country | The consumer or tourism authority in your country |
| EU, from 29 March 2029 | Linked arrangements abolished; a second service booked through a linked online process within 24 hours becomes part of a package | A duty to tell travelers when combined services are not a package; refunds within six months if the organizer fails (Directive 2026/1024) | Your country's transposing law, due by 29 September 2028 |
| UK, flights | Selling flight packages or flight-only to UK consumers, including from abroad | An ATOL, unless you sell as agent for an ATOL holder; a Small Business ATOL covers up to 500 passengers and £1m a year | Civil Aviation Authority |
| UK, other packages | Organizing packages without flights | Insolvency security by bond, insurance or trust account (Package Travel Regulations 2018, reg. 19); amendments from 6 April 2027 | legislation.gov.uk |
| California | Soliciting customers in California, wherever you are based | Seller of travel registration at $100 a year per location, and a trust account or bond for money taken for air or sea travel | California Attorney General |
| Florida | A business location in Florida, or offering travel for sale in Florida | Registration at $300 a year and a bond of up to $25,000 | FDACS |
| Washington | Transacting business with Washington consumers | Registration at $222, and a trust account or a bond of $10,000 to $50,000 depending on Washington revenue | Department of Licensing |
| Hawaii | Selling or advertising travel services in Hawaii | Registration ($215 or $146 depending on the year) and a client trust account in Hawaii, which agencies outside Hawaii taking only electronic payments can have waived | DCCA |
| Airline tickets | Issuing tickets yourself | IATA accreditation outside the US; in the US, ARC accreditation to issue tickets and IATAN for an industry code, both with financial requirements | A host, a consolidator or a flight API avoids this at the start |
The EU and the UK are both abolishing linked travel arrangements.
The EU's Directive 2026/1024 entered into force on 28 May 2026 and applies from 29 March 2029. The UK's amending regulations take effect on 6 April 2027 and bring bookings made in a single visit to the point of sale into the package definition.
An OTA that offers a hotel straight after a flight should design its checkout for the new rules now, because the platform chosen this year will still be running when they apply.
Where your inventory comes from: GDS, NDC, bedbanks and channel managers
An online travel agency can only sell what its suppliers give it access to, so this is where the business is really decided.
Unless you contract with every hotel and airline yourself, you sell inventory that someone else has gathered. The sources differ in cost and in how hard they are to join.
Bedbanks and the big OTAs' partner APIs
A bedbank contracts hotel rooms and resells them to agencies at net rates.
HBX Group, which owns Hotelbeds and listed on the Spanish stock exchanges in February 2025, lists more than 250,000 hotels in over 170 markets. WebBeds, whose parent company took the name WebBeds Group in August 2026, is the other large one.
Hotelbeds lets anyone register for test API keys, limited to 50 requests a day, and switches a partner to live access only after a certification of its booking flow.
The two large OTAs also sell their inventory to other businesses. Expedia's Rapid API offers more than 800,000 properties, and Expedia Group's B2B arm serves 75,000 partners and 200,000 travel advisors. Booking.com's Demand API is open to its managed affiliate partners.
Getting a supplier API live, step by step
Each supplier has its own path from test keys to real bookings, and none of them publishes a timeline, so plan for review rounds. Hotelbeds documents its path in the most detail:
- Register on the developer portal. The evaluation keys are limited to 50 requests a day and return an error above that.
- Build availability, rate check, booking, cancellation and the voucher. The certification guide asks for as many hotels per availability call as possible "without exceeding the limit of 2000 hotels per call", and checks your use of GZIP compression.
- Email apitude@hotelbeds.com to request certification. The review covers your technical setup, workflow, availability and confirmation calls, voucher and content.
- With live keys, confirm a real reservation six months ahead for two adults and two children, send the voucher and price, and then cancel it, because "otherwise you would be charged".
Expedia's path is narrower at the start. To use Rapid you need to be an Expedia partner, applications "will be reviewed case by case", and your key stays in development mode, working against a test endpoint, until your site passes a review against Expedia's launch requirements.
Duffel is the quickest. Its test mode books flights on a fictional airline, Duffel Airways, and to go live you add a card and top up your balance, after which, in Duffel's words, you can "go live right away without speaking to anyone".
GDS and NDC for flights
Amadeus, Sabre and Travelport, the three global distribution systems (GDS), connect agencies to airline fares, and Sabre has narrowed its focus to that business since selling its hotel technology unit in July 2025. Our guide to global distribution systems explains how a booking travels through one.
Airlines are moving sales onto NDC, IATA's API standard for selling flights; in an IATA survey, 81% of airlines had a live NDC channel by late 2024.
They push the move with price. Since January 2026 Lufthansa Group charges EUR 18 to EUR 23 on each ticket booked through a classic GDS connection, EUR 8 through a GDS's NDC channel, and nothing through its own NDC connection.
For a new agency, flights are thin ground anyway.
By Phocuswright's estimate only 13% of US airlines' online revenue passes through an OTA. A flight API such as Duffel, which charges $3 per order, or a host agency is the realistic way to add flights.
OTA, channel manager and PMS: who does what
A hotel runs a property management system (PMS) for reservations, check-in and billing. A channel manager connects the PMS to the sales channels, sending rates and availability to every OTA at once and passing bookings back.
Your OTA is one of those channels. If you contract hotels directly you connect to their channel managers; if you buy from a bedbank, the bedbank has made those connections for you.
Search engine, booking engine and metasearch: which one you need
A booking engine takes a traveler from a chosen rate to a confirmed, paid reservation. Every OTA needs one, and it is the part a white label platform provides.
A travel search engine answers what is available and at what price across your suppliers; at small volume it is part of the booking engine.
A metasearch engine such as Google Hotels, Trivago or Kayak compares prices across many sellers and sends the click to one of them.
You will advertise on metasearch long before you have any reason to build one. Our guides to building a travel search engine and to travel meta search engines cover the architecture for when you do.
Build, buy or use a white label travel portal
At launch, buy.
A white label travel portal or white label booking engine gives you a site under your own brand, running on someone else's software and inventory. An API product gives you the inventory and leaves the website to you. Either way you sell within weeks, and the money goes into supply and traffic instead of software.
These are live options, checked on each vendor's site in October 2026:
- Expedia's White Label Travel Platform: a branded site with more than 900,000 properties and 570 airlines; pricing on request.
- LiteAPI from Nuitee: a hotel API with a no-code white label site. The core booking flow is free at a "reasonable look-to-book ratio", and you set your own markup.
- Expedia's Rapid API and Booking.com's Demand API: hotel inventory for partners who build their own front end.
- Hotelbeds' APItude: bedbank inventory by API, after certification.
- Duffel: flights by API, $3 per order plus percentage fees on some content.
Building your own platform starts to pay when the rented one holds the business back. These are the signals:
| Signal | Rent: white label or API | Build your own |
|---|---|---|
| Demand | Not yet proven | Proven, and growth is limited by the platform |
| Suppliers | One or two wholesalers | Many direct contracts and wholesalers whose rooms must be combined and de-duplicated |
| Search volume | Inside the vendor's look-to-book limits | High enough to trigger excess-search fees or slow the site down |
| Pricing | The vendor's markup rules are enough | Your own pricing, bundling or yield management is what you sell |
| Data | The vendor's reports are enough | You need your own search and customer data to compete |
Search volume is usually the first limit.
Bookings are a small fraction of searches, and suppliers charge for the gap: Duffel allows 1,500 searches per booking and bills $0.005 for each search beyond that. An OTA that grows through metasearch reaches high ratios quickly, because every price it shows on Google or Trivago has to be fetched from a supplier or a cache.
That is the problem we solved for a UK hotel metasearch engine.
Its availability search ran on a SQL Server cluster where adding a machine raised cost by 2% and throughput by 0.1%. We moved search into an in-memory data grid and kept SQL Server as the system of record, and traffic grew 50% to 300 million queries a day while response time fell 60% and infrastructure cost fell 80%.
A company at that scale needs its own engine. A founder with a niche and a first bedbank contract does not, and we say so when one asks us.
Rent the platform, prove the demand, and keep the customer data and the domain in your own hands, so that moving to your own platform later keeps your booking history and your search rankings.
OTA commission rates and margins in 2026
Hotels pay OTA commission rates on the agency model, and the big OTAs do not publish them.
Booking.com's partner help says only that the percentage depends on the country, the property type and the signed agreement, and that properties in its Preferred Partner or Visibility Booster programmes pay more.
The clearest public figure comes from a regulator.
In May 2025 the Swiss Price Supervisor ordered Booking.com to lower its average commission for Swiss hotels to at most 10.3%, a cut of just under a quarter; the order gives the rates it replaced only as a range of 10 to 20%. Booking.com has appealed, and the order is suspended while the appeal runs.
A new OTA sees the other side of that money.
Buying from a bedbank or an API, you earn a share of the commission or a markup on a net rate, after the wholesaler has taken its own margin (6.8% at WebBeds). Across all its brands, Booking Holdings kept revenue equal to 14.5% of gross bookings in 2025.
Your margin has to fit inside numbers like these and still pay for the click that brought the traveler. Channel managers charge hotels a subscription, so they affect your margin only if you contract hotels directly and pay for the connection.
Price parity in Europe
For years OTAs required hotels not to sell more cheaply anywhere else.
In September 2024 the EU Court of Justice ruled that price parity clauses cannot, in principle, be treated as ancillary restraints, which means competition law applies to them in full. In May 2024 the European Commission had already designated Booking.com a gatekeeper under the Digital Markets Act, whose Article 5(3) bars it from stopping hotels offering different prices elsewhere.
For a small OTA in Europe this helps: a hotel may now give you a better rate than it gives Booking.com.
Online travel market numbers for 2026
The figures below give a sense of the market a new agency enters, and of how much of it already runs through online channels.
| Figure | Value | Source |
|---|---|---|
| Global online travel bookings, 2025 | $1.07 trillion (projection) | Phocuswright |
| Global OTA bookings, 2025 | $408 billion, about one travel dollar in four (projection) | Phocuswright |
| US OTA gross bookings, 2025 | $100.3 billion, one fifth of US travel bookings | Phocuswright |
| UK hotel distribution, 2025 | Supplier-direct online about 35%, OTAs about 32% | Phocuswright |
| OTA share of European hotel overnights, 2025 | 29.9%, up from 19.7% in 2013 | HOTREC |
| Booking Holdings room nights, 2025 | 1.235 billion, up 8% | Annual report |
| Expedia Group booked room nights, 2025 | 415 million, up 8% | Full-year results |
Phocuswright's figures are research-firm estimates. HOTREC represents hotels, which pay OTA commissions. The company figures are as reported.
Those figures describe the retail side.
A new OTA gets its inventory from the wholesale side, which is large in its own right: Expedia's B2B business serves 75,000 partners and 200,000 travel advisors and processes 21 billion API calls a day, HBX Group reports 6.2 billion daily searches across its platforms, and WebBeds grew its total transaction value 20% to A$5.8 billion in the year to March 2026.
Those are the companies whose APIs your first bookings will run through, and their scale is why renting their inventory is cheaper than contracting hotels one by one.
Overbooking and stale availability
An OTA overbooks when it sells a room its supplier no longer has.
The usual cause is a cached price: the site shows availability it fetched minutes or hours earlier, the hotel sells the last room through another channel, and the booking fails at the supplier or, worse, confirms against inventory that is gone. For the traveler that means arriving at a hotel with no room, and for the agency a rebooking at its own cost and, often, a lost customer.
The fix belongs in the booking flow.
Show cached prices while the traveler browses, and check live availability and price before taking payment. Expedia's Rapid API has a price check step for this, and Hotelbeds' best practice guide states that a booking never needs more than one availability request and one rate check.
Suppliers also cap what a single request may ask for. Expedia's Rapid shopping API returns rates for at most 250 properties per request and no more than eight rooms, and Hotelbeds caps an availability call at 2,000 hotels. A search over a whole city has to be split, and every extra call counts against your look-to-book allowance.
The practical answer is a cache policy per kind of data.
Hotel descriptions and photos change rarely and can be refreshed daily. Prices for browsing can be minutes or hours old, depending on how volatile the destination is. The price and availability at checkout must be live.
Our guide to building a travel search engine covers how to decide how stale each answer may be.
Then decide in advance what happens when a confirmed booking fails anyway: an equal or better hotel at your cost, a full refund, or both.
A white label platform handles the checks, but the policy is yours to write.
Personalizing the booking experience on a small budget
The large OTAs treat personalization as strategy.
Booking Holdings' 2025 annual report describes its Connected Trip as "a differentiated and personalized travel planning, booking, payment, and in-trip experience for each trip", and Expedia Group's says it delivers "predictive, personalized experiences" from first-party data. A niche OTA cannot match their data, but it can do the parts that need little of it:
- Remember search defaults: home airport, party size, the usual trip length.
- Show recently viewed and saved trips on the home page.
- Offer "travelers who booked this also booked" from your own booking history, once you have a few hundred bookings.
- Time the extras to the trip: transfers, ski passes or dive equipment offered after booking, when the traveler is planning the details.
- Filter on what your niche cares about, which is personalization through better item data: step-free access, cots available, nitrox on board.
Ask the platform vendor which of these it supports and whether you can export the behaviour data; it is the asset you will want if you move platforms later.
Personalization runs on tracking, and tracking needs consent.
In the EU, the ePrivacy Directive allows storing or reading information on a user's device only with consent, except where it is "strictly necessary" for a service the user asked for. The UK's ICO guidance says that cookies "that are helpful or convenient but not essential" still need consent; it is being revised after the Data (Use and Access) Act added exemptions, so check the current version.
For email, the ICO's soft opt-in lets you market to existing customers who bought a similar service, with an opt-out in every message, but not to bought-in lists.
A recommendation engine starts to pay once the catalogue is larger than a traveler can browse and you have the booking volume to learn from.
Managed services set the floor: Amazon Personalize will not train on fewer than 1,000 interactions. Our guide on how to build a recommendation engine covers the steps when you reach that point.
AI and agentic booking: what changes for a new OTA
Travelers have started to book inside AI assistants.
Booking.com and Expedia were among the first apps in ChatGPT in October 2025, and in August 2026 Google began rolling out hotel booking in AI Mode in US search, with Booking.com, Expedia, Hotels.com, Priceline, Trip.com and several hotel chains as partners.
A traveler who used to click from Google through to an OTA can now finish the booking without visiting one.
Generic hotel search, which the giants already dominate, is moving into assistants that a small agency cannot join, and that makes the case for a niche stronger.
A specialist whose products the assistants cannot assemble, such as a liveaboard dive trip or a school group package with its paperwork, still brings the traveler to its own site.
Inside the business, AI earns its place on routine work: answering standard booking questions and tagging inventory so that search can filter on what your niche cares about. Booking.com's own first agentic tools, launched in October 2025, were of that kind: a messaging assistant and automatic replies for its partners.
If you already sell travel online and the platform has become the limit, because searches grow faster than bookings, your suppliers outnumber what the vendor can combine, or your pricing no longer fits its rules, that is the work our travel software development team does. A scoping call gets you a written ballpark with its assumptions before any work starts.