The Hidden Cost of OTA Commissions: Why Direct Bookings Matter More Than Ever
For many hotels, online travel agencies (OTAs) like Booking.com and Expedia feel unavoidable. They promise visibility and global reach—but at a steep price. While OTAs can help fill rooms, the commissions they charge—often 15% to 25% per booking—quietly eat away at hotel profits.
For a 50-room hotel with strong occupancy, OTA commissions can easily add up to tens or even hundreds of thousands of pounds annually—money that never reaches the hotel’s bottom line.
Less Profit, Less Investment
Every euro lost in commission is a euro that can’t be reinvested. Hotels rely on healthy margins to:
- Upgrade rooms and facilities: Modern guests expect refreshed interiors, high-quality furnishings, and updated amenities. OTA fees reduce the budget for renovations.
- Improve staff wages and training: Hospitality is about people. Commission-heavy bookings make it harder to reward teams or invest in professional development.
- Enhance guest experience: Investments in wellness programs, local partnerships, or tech solutions that improve convenience often get delayed when margins shrink.
- Market the property independently: Ironically, the more you spend on OTAs, the less you have to invest in direct marketing—keeping you locked into dependence on external platforms.
The Dependency Trap
Perhaps the biggest hidden cost of OTAs is strategic, not financial. Heavy reliance on OTA channels means hotels surrender control of:
- Customer relationships: OTAs own the guest’s data, making it harder to build long-term loyalty.
- Pricing flexibility: Commission structures often restrict creative offers or discounts.
- Brand identity: Guests remember they booked through Booking.com, not your hotel website.
This dependency erodes brand strength and leaves hotels vulnerable if OTA terms shift further in the future.
The Case for Direct Bookings
Shifting even a fraction of bookings away from OTAs can transform hotel finances. A 20% swing in channel mix often equates to tens of thousands of euros in savings—funds that can be redirected into property improvements, technology upgrades, or guest services.
Direct bookings also mean:
- You own the guest relationship from the start.
- You can craft personalized experiences that build loyalty.
- You control pricing, offers, and packages without commission pressure.
Investing in Your Future
Every euro saved on commission is an investment in the future of your hotel. Whether it’s upgrading your rooms, enhancing digital marketing, or creating memorable guest experiences, direct revenue has a multiplier effect. Instead of enriching global OTA platforms, those funds can strengthen your business, staff, and community.
Bottom line: OTAs will always play a role in hospitality distribution, but unchecked dependence is costly. By prioritizing direct bookings—through your website, marketing efforts, and smart tools—you protect profits and ensure your hotel has the resources to reinvest, grow, and thrive.
