Online Travel Agencies (OTAs) have revolutionized how travelers book accommodations, providing global visibility to hotels of all sizes.

However, while the reach of OTAs is undeniable, the impact of OTA commissions on hotels has become a growing concern, especially for independent and mid-sized properties.

What are OTA Commissions?

When a guest books a room through platforms like Booking.com, Agoda, Expedia, or Airbnb, the hotel pays a commission fee to the OTA.

These OTA commissions usually range between 10% to 25% of the room rate, depending on the agreement and market.

While this cost is often seen as a marketing expense, over time, it can have a significant impact on a hotel’s profit margin, especially for properties that rely heavily on third-party bookings.

The Impact of OTA Commissions on Hotels

The main impact of OTA commissions is reducing profit margins on hotels. High commissions can cut deeply into net revenue per room, especially when a large portion of bookings comes from OTAs.

In additions, there are also other impacts of listing hotel on OTA, namely:

1. Price Parity Pressure

Many OTAs enforce price parity clauses, preventing hotels from offering lower prices on their direct channels.

This limits flexibility in promotions and discounts.

2. Decreased Brand Loyalty

When guests book through an OTA, they often associate the experience with the platform, not the hotel.

This weakens opportunities for direct engagement and long-term loyalty.

3. Limited Control Over Guest Experience

OTAs act as intermediaries, which can reduce a hotel’s ability to personalize communication or upsell services before arrival.

4. Dependency Risks

Relying too heavily on OTA traffic makes a hotel vulnerable to algorithm changes, commission hikes, or sudden policy shifts.

Strategies to Minimize the Impact of OTA Commissions

To reduce the long-term effects of OTA dependency, hotel owners can adopt these strategic actions:

1. Encourage Direct Bookings

Use your website and social media to promote exclusive benefits for guests who book directly (e.g., free breakfast, room upgrades, flexible check-in).

2. Invest in a Booking Engine

With solutions like GuestPro Booking Engine, you can provide a seamless and user-friendly direct booking experience that competes with OTAs.

3. Build a Loyalty Program

Reward repeat guests with points, discounts, or special packages. A well-managed loyalty program shifts repeat bookings away from OTAs.

4. Optimize Google and SEO Presence

Ensure your Google Business profile is up-to-date and improve your SEO to capture organic traffic that leads to direct reservations.

5. Use Guest Data for Smart Marketing

Capture emails and preferences from direct bookings, then use tools like GuestPro CRM to run targeted email campaigns or retargeting ads.

Conclusions

While OTAs play a key role in hotel visibility and occupancy, the impact of OTA commissions on hotels should not be ignored.

By combining technology, personalized marketing, and direct booking strategies, hotels can reduce dependency, protect their margins, and build stronger guest relationships over time.