Reduce OTA Commission and Boost Hotel Profits: A Hotelier’s Action Guide
Are OTA Commissions Shrinking Your Margins?
If you’re a hotelier, you already know the pain of losing up to 25% of your room revenue to Online Travel Agencies (OTAs). While OTAs help fill rooms, they also eat into your profitability. It’s time to rethink your hotel marketing strategy—one that prioritizes direct bookings through the right tech stack and operational approach.
Understanding the Role of OTAs in Your Distribution Mix
Online Travel Agencies offer global visibility, diversified traffic, and high-volume bookings. However, these advantages come at a cost—commission rates can range from 15% to 25%, cutting directly into your bottom line.
Recent data from 2024 shows that Booking.com’s average global commission rate is 15%, while independent hotels pay Expedia commissions of 15-30% compared to large hotel brands that pay less, in the region of 10-15%.
OTAs aren't the enemy. They're part of a healthy hotel distribution strategy, but overdependence limits your control and profitability.
Booking Source | Avg. Commission (%) | Control Over Guest Data | Loyalty Potential |
OTAs (e.g., Expedia, Booking.com) | 15–25% | Low | Low |
Direct Website Booking | 0% (tech cost only) | Full | High |
Corporate/Group Bookings | Varies | Medium | High |
1. Create a Strong Direct Booking Strategy
Complete OTA elimination isn’t realistic—but reducing reliance is. Start with your PMS and OTA integrations to understand booking trends, and segment your audience by geography, lead time, and booking source.
According to the 2024 Direct Online Distribution Report, 77% of hotel online bookings in Europe came from OTAs, almost 10% above other regions. Asia Pacific had the second-highest dependence, reaching 68.6% in 2024, a 3% increase from 2023. These alarming statistics highlight the urgent need for independent hotels to diversify their booking channels.
Tip for Hoteliers: Always calculate the cost per guest acquisition of your direct channel. Your commission-free booking system still involves website hosting, SEO, and ads—but the long-term ROI is higher.
2. Diversify Your Online Booking Channels
Putting all your eggs in one OTA basket is risky. Algorithm updates or contract changes can drop your visibility overnight. Instead, use multiple OTAs alongside direct booking strategies.
OTA Name | Bookings Contribution (%) | Commission (%) | Risk Level |
OTA A | 60% | 18% | High |
OTA B | 25% | 15% | Medium |
OTA C | 15% | 22% | Low |
Also, don’t forget social media, Google Hotel Ads, and WhatsApp reservations as low-cost, high-engagement booking channels.
3. Optimize Your Website for Guest Conversion
Your hotel’s website is more than a brochure—it’s your top-performing sales agent. It must be:
- Mobile-first and fast-loading
- Integrated with real-time rates and availability
- Designed for one-click booking
- Optimized for SEO with schema and Google Business Profile
Pro tip: Add trust signals—badges, awards, Google reviews, and TripAdvisor ratings—to influence booking decisions.
4. Improve the Mobile Booking Experience
More than 50% of hotel bookings now come through mobile. If your mobile experience lags, you’re losing revenue—often to OTAs.
Checklist for Mobile Optimization:
- ✅ Responsive site design
- ✅ Mobile-optimized booking engine
- ✅ Click-to-call and WhatsApp chat buttons
- ✅ Mobile wallet payment gateway support
5. Offer Compelling Direct Booking Incentives
Guests will always compare prices. So, make your direct offer more attractive without undercutting rate parity rules.
Popular Direct Booking Perks:
- Complimentary breakfast
- Room upgrades (if available)
- Early check-in or late checkout
- Restaurant discounts or spa credits
- Free airport transfer
These extras build perceived value and increase guest satisfaction.
6. Strengthen Your Hotel Marketing Strategy
If your hotel website or ad creative looks like everyone else’s, you’ll blend into the OTA crowd. Build a brand voice that resonates emotionally. Highlight what makes your property unique—location, culture, cuisine, or personalized service.
Example Strategy: Run retargeting ads showing real guests enjoying your pool or dining area with a caption like: “Wish this was you? It could be. Book direct and save.”
This appeals to emotion while nudging them toward your direct booking engine.
7. Build Loyalty Beyond the Stay
Repeat guests are your most profitable ones. Start building a relationship before check-in:
- Pre-stay email: Add-ons, upgrades, directions
- During stay: Feedback requests, room personalization
- Post-stay: Discount codes for return bookings, review reminders
You don’t need complex software. Even a simple CRM or guest profile sheet can do wonders in retaining guests.
AxisRooms: Helping You Regain Revenue Control
Why Hoteliers Choose AxisRooms:
- Unified control of rates across all platforms
- Customizable, mobile-friendly booking widget
- Deep OTA integration analytics
- Seamless connection with payment gateways
- Real-time updates between PMS and booking channels
👉 Request a Free Demo and see how AxisRooms can help increase profitability without increasing workload.
Final Thoughts
High OTA commissions are not just an operational cost—they’re a strategic choice. With smarter distribution planning, the right technology, and a strong hotel marketing strategy, you can gradually shift bookings toward more profitable direct channels.
Start with small steps: optimize your website, incentivize direct bookings, and nurture loyal guests. Tools like AxisRooms can make the transition smoother and your bottom line stronger.