The Holiday Discount Dilemma: Decoding OTA Strategy in 2025

NEW YORK, NY – November 24, 2025 – As the holiday season approaches, the familiar scramble for affordable travel has begun, but with a new rhythm. This year, the starting gun for deals wasn't a single day, but a prolonged, multi-week event. Online travel agency (OTA) CheapOair fired a significant salvo, announcing an extended lineup of promotions stretching from Black Friday through the first week of December. The campaign promises travelers savings of up to $60, aiming to capture a slice of the booming but budget-conscious holiday travel market.

The announcement taps directly into the prevailing consumer mindset. With over half of Americans planning a trip this holiday season—the highest intent in years—financial caution is paramount. Average travel budgets are down a notable 18% from 2024, forcing travelers to scrutinize every dollar. In this environment, an extended sales period from a major OTA appears to be a welcome gift. As Thomas Spagnola, Sr. Vice President at CheapOair, noted, "travelers who book now can take advantage of great options for dates and destinations." Yet, beneath the surface of these enticing offers lies a complex and fiercely competitive industry landscape, where the structure of a deal is as important as the headline number.

The Anatomy of a Discount

The central pillar of CheapOair's strategy is its focus on discounting its own service fees, a distinct approach in the OTA arena. The promotions offer tiered savings—up to $40 for Black Friday, $50 for Cyber Monday, and peaking at $60 for Travel Tuesday—that are applied against the booking fees the company charges, not the total cost of the flight or hotel. These service fees can range up to $35 per airline ticket, $42 per night for hotels, and $50 per passenger for vacation packages. Therefore, a "up to $60" discount is capped by the value of the fee on a given transaction.

This model contrasts sharply with the tactics employed by its largest competitors. During the same period, giants like Expedia and Priceline have leaned into percentage-based discounts on the total price of a booking. Expedia, for instance, offered up to 50% off thousands of hotels and ran flash deals with discounts reaching as high as 75%. Priceline countered with mystery coupons, some promising up to 99% off, alongside broad discounts of up to 60% on packages and 30% on hotels.

For the consumer, this distinction is critical. A service fee discount on a complex, multi-person international booking might provide meaningful savings. However, for a solo traveler booking a domestic flight, the discount could be as low as $10. In contrast, a 30% discount from a competitor on a $500 hotel stay yields a direct $150 reduction in out-of-pocket cost. The strategic brilliance for the OTA is clear: it allows for eye-catching marketing headlines with large dollar figures while precisely controlling the promotional cost, as the discount can never exceed the company's own revenue from the service fee. This positions the brand as a value leader without deeply eroding margins on the underlying travel products themselves.

The Evolving Holiday Booking Calendar

CheapOair’s extended sale is more than a standalone promotion; it's a reflection of a fundamental shift in how travel is marketed and purchased during the year's busiest shopping season. The traditional Black Friday and Cyber Monday retail frenzy has officially spawned a dedicated offshoot: Travel Tuesday. Search interest for this travel-specific deal day has surged over 500% since 2021, signaling a powerful change in consumer behavior. Travelers are now conditioned to wait for this post-Thanksgiving window to lock in their plans.

This trend is creating a bifurcated market. On one side are the meticulous planners, with data showing a surprising 37% of 2025 travelers booking their trips 8-10 months in advance to secure specific dates and destinations. On the other side is a growing cohort of deal-hunters who deliberately delay booking, compressing their decision-making into the promotional window between Thanksgiving and early December. OTAs are capitalizing on this by stretching their sales events over a week or more.

This extended calendar serves multiple strategic purposes. It helps capture the attention of cost-conscious consumers, particularly the Gen Z and Millennial demographics that now represent half of all holiday travelers but are also reporting the sharpest cuts to their travel budgets. By creating a sustained "season of savings," OTAs can smooth out the frantic demand spikes of single-day sales, better manage inventory, and build a longer-lasting marketing narrative. It transforms the booking process from a frantic, one-day dash into a more considered, week-long shopping experience.

A Calculated Gambit in a Crowded Field

The decision to anchor a major holiday campaign on service fee discounts is a calculated gambit in the hyper-competitive OTA market, a sector dominated by giants like Booking Holdings and Expedia Group. These companies are not only competing with each other but also with the strengthening direct-to-consumer channels of airlines and hotels, which are running their own aggressive holiday sales.

In this environment, differentiation is key. By focusing on service fees, a company can carve out a unique marketing message that stands apart from the ubiquitous percentage-off deals. It’s a strategy that plays on the psychology of savings; for many consumers, a fee is a "junk charge," and a direct discount on it feels like a tangible win. It also allows the OTA to maintain pricing integrity on the core product—the flight or hotel room—preserving crucial relationships with its airline and lodging partners.

However, this strategy also puts pressure on the entire ecosystem. As major OTAs create and extend these massive sales events, they force competitors to respond in kind, escalating the annual holiday price war. Smaller agencies may lack the marketing muscle or financial flexibility to compete, potentially accelerating market consolidation. For consumers, the proliferation of complex, multi-day deals with varying terms and conditions heightens the need for diligence. The ultimate winner in this holiday travel maze is not necessarily the one who finds the biggest advertised number, but the one who understands precisely what is being discounted. As the industry continues to evolve, the most successful players will be those who can offer not just the perception of value, but transparent and substantial savings that resonate with an increasingly savvy and discerning traveler.