What OTA commission really costs a small hotel
Online travel agencies (OTAs) bring guests you wouldn’t otherwise reach, and for most small hotels they’re not optional. But it’s worth knowing exactly what they cost, because the number is usually bigger than owners expect, and a few direct bookings a month change it noticeably.
The numbers
From industry reports published in 2026:
- Independent hotels received about 63% of their bookings through OTAs in 2025, according to Cloudbeds’ 2026 State of Independent Hotels report, based on around 90 million bookings.
- OTA commission is typically 15 to 30% of the booking value, while the cost of a direct booking, including your booking engine, payment fees and marketing, is around 5 to 12%.
- Cancellation rates are about 21.8% for OTA bookings against 10.6% for direct bookings.
A worked example
Take a 12-room guesthouse with an average rate of 60 per night, 65% occupancy and 63% of bookings through OTAs at 18% commission.
| Per year | |
|---|---|
| Room nights sold (12 × 365 × 65%) | 2,847 |
| Room revenue (× 60) | 170,820 |
| Revenue through OTAs (63%) | 107,617 |
| Commission paid (18%) | 19,371 |
Now suppose one in ten OTA guests books direct instead, at a direct cost of 8%. That moves 10,762 of revenue from 18% to 8%, saving about 1,076 a year, before counting the lower cancellation rate. Moving one in four saves about 2,690.
Small percentages, real money. And repeat guests who book direct once tend to keep doing it.
Why cancellations matter too
A cancelled booking costs you more than the lost night. The room may not resell at short notice, and if it does, it’s often at a discount. With OTA bookings cancelling at about twice the direct rate, each direct booking is also more likely to turn into revenue.
Low-effort ways to win direct bookings
None of these need a big marketing budget.
Make booking on your site as easy as on the OTA
If your site’s booking form has more steps than Booking.com, guests will go back to Booking.com. Test it on a phone. You should be able to see availability and a price within two taps of your home page.
Give a reason to book direct
Guests look for your website after finding you on an OTA. Show them something the OTA can’t: free breakfast, late checkout, a room upgrade when available, or simply a slightly lower price. State it clearly next to the booking button.
Check your OTA contracts first. Some restrict publicly showing lower prices on your own site, but most allow perks or member-only rates.
Turn OTA guests into direct guests
OTA guests are still your guests once they arrive. A friendly note at checkout with your website and a returning-guest code costs nothing and works well, especially for business travellers and families who come back each year.
Answer messages quickly
Guests who message before booking are close to deciding. A reply within the hour, on whatever channel they used, often secures the booking. Our arrivals routine includes a slot for this.
Keep the OTAs, change the mix
The goal isn’t to leave the OTAs. They’re your shop window. The goal is that guests who already know you, or found you and looked you up, can book with you directly and easily. A shift of a few percentage points is enough to pay for a good booking plugin many times over.
Sources: Cloudbeds, 2026 State of Independent Hotels report; Hotel Online, “What OTAs actually cost in 2026”; Hospitality.today, on the economics of direct booking.