When I talk to owners of hospitality properties, I often notice great enthusiasm for the “fully booked” status. But as an economist, my first question is always different: how much of that revenue actually stays in your pocket?
We know that Booking and Expedia keep commissions between 15% and 30%. Add visibility programs like Genius or Preferred and margins get even thinner. But the commission is just the tip of the iceberg. There are invisible costs, often ignored, that undermine the long-term economic sustainability of your business.
The Hidden Cost of OTA Dependence: Beyond the Commission
Imagine building a beautiful villa on land that doesn’t belong to you. If the landowner decides to change the rules or evict you, you lose everything.
Basing your business only on OTAs (Online Travel Agencies) means exactly this: building on someone else’s land. Accepting an intermediated booking carries a very high CAC (Customer Acquisition Cost).
A property generating €100,000 in revenue through OTAs, with an average commission of 18%, pays €18,000 a year to third parties. Resources that could be reinvested in the property, the staff, or owned marketing.
However, the strategic damage goes beyond the immediate money and comes down to three fundamental losses:
- Lack of Data Ownership: In modern tourism, the most valuable resource is not the room, it’s the data. If you don’t own the guest’s email and history, you can’t generate future revenue at zero cost.
- Net RevPAR Erosion: Many measure success with RevPAR (Revenue per Available Room), but it’s an incomplete metric. The true indicator is Net RevPAR, i.e., revenue net of commissions and marketing costs. If your RevPAR is €100 but the booking is intermediated, your real value drops below €80. Ignoring this means overestimating your capacity to invest.
- Substitution Risk and Rigidity: For a platform, your room is a commodity, a replaceable product. If a competitor lowers the price, the algorithm penalizes you. What’s more, you’re subject to standards and cancellation policies that limit your operational freedom.
Let’s be clear: for a small property, eliminating OTAs entirely is almost impossible. The goal is not elimination but optimization of the distribution mix.
OTAs should be your acquisition channel (the so-called Billboard Effect), but your website must be the conversion engine. Often a guest discovers you on Booking and then visits your official site to look for confirmation. If at that moment you don’t offer trust, speed, or a clear advantage, the user will go back to the platform. In that second, you’ve lost the chance to turn a variable cost (the commission) into net margin.
OTAs are not the enemy. They are an acquisition channel. The problem arises when they become the only channel.
3 Strategies to Increase Direct Bookings (Now)
To regain control of your economic destiny, you need to act on three levels:
1. Optimize Your Booking Engine to Convert
If booking on your website is harder than on Airbnb, the user will always choose Airbnb. An effective booking system must be:
- Mobile-first: over 60% of searches happen on smartphones.
- Reassuring: it must show reviews and certifications (Social Proof).
- Flexible: clear cancellation policies increase conversion.
- Persuasive: urgency indicators (e.g., “last room”) help close the sale.
2. Build a Direct Relationship
A guest who books directly and is nurtured becomes an asset that generates pure profit for years to come. It’s the concept of Lifetime Value: disintermediation is not just immediate savings, it’s relationship capital.
Don’t neglect the post-stay: an email sequence that thanks, asks for a review, and offers an incentive to return is the strategy with the highest ROI (Return On Investment) of all.
If you want to better understand the difference between managing your property professionally or haphazardly, read our article on how to go from being a host to a hospitality entrepreneur.
3. Decide Based on Data
You can’t improve what you don’t measure. Analyze your channel mix: what percentage comes from OTAs and what from your website?
In high season, when demand is strong, you can afford to push on the direct channel. In low season, OTAs become a valuable fill tool again. The goal for a healthy property is to reach 35-45% direct bookings.
The First Step? Find Out Where You Stand!
We created a free test that gives you a digital maturity score and tells you exactly which levers you can activate now to increase direct bookings.
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