The Great Debate: OTAs v. Operators, who will win the AI Era?

I give a lot of speeches and talks, I speak on and moderate many panels, I lead a lot of round tables, and I write a lot (and publish a little). But last week at Arival ’s inaugural AI Forum for Destination Experiences, I got to do something really special and super fun. I was honored to moderate what we called The Great Debate!

There are an endless number of debates and conversations taking place across our industry and world about the myriad ways AI will impact our businesses, lives, and society. For me, Business Moats and Human-AI Ethics are the topics Du Jur. But for the Travel & Hospitality industry, the top debate is about the decades-long power struggle between OTAs/Resellers and Suppliers/Operators. Specifically, who will be the primary beneficiary of the Great Commoditization of AI. 

Rather than rehashing stale talking points in separate echo chambers, Bruce Rosard and the team at Arival decided we could do better…and I am thrilled to say that we did!!

We in the room and our industry at large were fortunate to have 6 brilliant debaters step up to share their views of the future, to answer some tough questions, to be challenged publicly, and to do all of this for the benefit of us all!

Our 6 brave debaters were:

Team Booked and Boosted (The Distributor/OTA Team)

Kristin D. , Chief Operating Officer, Viator

Carrie K. , VP & GM, Tours & Attractions, Groupon

Dan Flores , Head of Tourism, Satisfi Labs  

Team No Middle, Just Magic (The Direct/Operator Team)

Lori Timony , SVP Global Trade Sales, Go City®

Oliver Green , Co-founder & CMO, Carpe Diem Tours

Rudi Thun , Co-founder & COO, Mindtrip, Inc.

We kicked things off with Team No Middle, Just Magic (Team Direct). This team made some very compelling points in their opening statements and followed that up with some thoughtful and relevant follow-ups.

Rudi, the COO at Mindtrip, Inc. , started with an important truth. It seems almost inevitable that over the coming 5 years the way consumers use the internet will change, and thus it’s reasonable to believe the way travelers discover and book travel products will also change. Further, early indications point to the fact that users love the new AI paradigm and use case. And of course, AI is much more flexible than traditional code, which will break down the historic silos that travelers have had to navigate.

Thus, Rudi said, “I believe the new UX paradigms will lead to market share changes and even shocks!” in favor of non-OTA direct channels. 

Lori Timony added a few important points from her perspective as the SVP of Global Trade Sales & Business Development at GoCity. She built her argument from a first-principles perspective. She began by stating some key truths, including the fact that the supplier/operator is the single source of truth and thus the best source of authenticity. The fact that they control the price, hours, availability, etc. In a world where there are millions of AI Aigents out there, those Aigents will seek the cleanest and most accurate data and that will come from the supplier, she argued.

Further, she makes the point that customer loyalty will be with their AI Aigent (or human advisor, I would add) and with the operators providing the experience, but not with the OTA. And she concluded with perhaps the most important point. There is a huge economic incentive for the supplier to disintermediate the OTA. An incentive of up to 30% of their revenues! 

Oliver Green, of Carpe Diem Tours, was the third member of this team. His take is that Tour Operators can win this AI era if they play their cards right and focus on authenticity. He shared, “Tour operators need to focus on creating unique and niche content across their platforms to stand out. In a future shaped by AI, travelers will increasingly seek authentic and immersive experiences. Operators have the chance to capture this demand and differentiate themselves by showcasing the depth and originality of what they offer.” 

These strong points made by the Direct Team were quickly met by equally strong arguments from Team Booked and Boosted (OTA & Reseller Team).

Carrie, a VP and GM at Groupon who knows a lot about Aggregation, argued that, “Tour and Attraction Operators will need to stay diversified across channels - established platforms handle brand-driven discovery that reduces cannibalization because 'experience gifts near me' still serves a different intent than direct bookings.” She added that, “aggregated supply is the only scalable path forward.”

Her teammate, Dan Flores, the Head of Tourism at Satisfi Labs , has real experience on both sides of this market. He shared that from his experience, the operators simply cannot adapt and adopt new technologies fast enough to win the race. He points out that “Paid went to OTAs, SEO went to OTAs, and AI is shaping up the same way. Unless operators move collectively and quickly, the big resellers will keep winning by default.” Even though he stressed his love for Direct Suppliers and his desire for them to succeed, he made some compelling and practical points about the strength of OTAs.

Kristin Dorsett the COO at Viator (which is a critical business unit within Tripadvisor ) helped encapsulate the OTAs advantage from the macro market perspective. She highlighted that the OTAs will have an advantage to win the booking within whichever AI platforms own the research journey due to their trusted global brands, structured data including millions of reviews, and real-time pricing and availability. She further added that critical post-booking capabilities like 24/7 customer service, FAQs, and more are things that individual operators will never be able to offer at the same scale.

Both sides spoke about the importance of Brand (and I agree), and thus, we are likely to see a lot of focus on this front from all players.

After the rounds of opening statements and rebuttals, we kicked off the period of open debate with a few questions that I hoped would challenge each of the teams and set up a good open dialogue between the debaters. My first question to the Supplier/Operator team was about the reality that it will likely always be easier for an AI provider, like OpenAI or Perplexity, to connect with an OTA and get thousands of suppliers at once, as opposed to directly connecting and contracting with these thousands of providers directly. I followed that up by pointing out that in such a large and fragmented industry, like ours, one thing consumers seek in the purchase path is a way to build trust, get verification, and access recourse (like insurance or refunds) when things go wrong. I asked, aren’t the OTAs in a better position to provide that trust, safety, and verification?

I followed that up by asking the OTA & Reseller team about the fact that Direct Booking feels more authentic and often offers more personalization and perks for the traveler than a reseller booking, which is why so many prefer to book direct. Further, I challenged them on the information accuracy and timeliness element, which is at the core of what the LLMs are seeking from third-party partners.

Both teams had strong pushbacks, eloquent follow-up points, and asked the other team some tough questions of their own. I am so grateful to all 6 of our debaters. They are brilliant, brave, and represent the best of us, as collectively they are working to elevate the travel experience and ensure that the traveler is the real winner of this era.

My take is simple. The winners and losers of this AI Era will not be determined based on their place in the funnel or business model but on their willingness and ability to adopt, adapt, and innovate in this new world. As I often remind CEOs and their Boards, the winners of the Mobile Era were not the first companies to launch a phone app but rather those who committed to a decade of test and learn, and the same will be true for this AI Era.

Thus, one thing I can be sure about is that all 6 of the companies and debaters we saw on stage are likely to be among the winners; as demonstrated by their leadership on this topic. And the rest of us can ensure that we are among those winners by simply committing to a philosophy of Testing, Learning, and Iterating.