OTA vs. Direct Bookings: Resolving Hotel Channel Conflicts

As travel demand evolves, hotel marketing is no longer just about visibility—it’s about being discovered where booking decisions are made. This report explores how search, social, and AI are reshaping guest acquisition.

Hotels need both OTA and direct bookings to maximize revenue. Here's what you need to know:

Channel	Pros	Cons	Revenue on $100 Room
OTAs	• Global reach • $14B marketing power • Fill empty rooms	• 15-30% commission • No guest data • Limited control	$70-85
Direct	• No commission • Full guest data • Price control	• Need marketing budget • Less reach • Slower growth	$90-100

Key Facts:

OTAs control 57% of online bookings
Direct bookings cost 6.5x less to acquire
65% of direct bookers first find hotels on OTAs

What's Working Now:

Hotels use OTAs for global reach
Push direct bookings through rewards programs
Match prices across all channels
Use booking engines that work on phones
Connect with OTA guests to convert them to direct

Bottom Line: Don't pick sides. Smart hotels use both channels - OTAs for reach and direct bookings for profit. The goal? Get to 50-50 split between OTA and direct bookings.

Want proof? Hilton's "Stop Clicking Around" campaign boosted direct bookings by 27%. Small hotels can compete using pay-per-booking tools like Sail for social media ads.

1. Booking Through OTAs

Here's what hotels pay to work with major OTAs:

OTA Platform	Base Commission	Additional Costs
Booking.com	15-25%	Up to 40% with visibility options
Expedia	15-30%	Extra fees for promotions
Agoda	Up to 25%	Varies by region

Let's break down the math:

When you book a $100 room through an OTA at 20% commission, the hotel only keeps $80. That's $20 LESS than what they'd make from direct bookings.

But it's not just about the money. Here's what hotels get (and give up):

Pros	Cons
Access to 80% of travelers	Loss of guest data
$14B in OTA marketing reach	Higher cancellation rates
Fill rooms in slow seasons	Limited pricing control
Reach international markets	Up to 40% cost with add-ons

Booking.com and Expedia Group dominate online travel bookings. And they set some strict rules:

Same prices across all platforms
Full room inventory access for OTAs
Limited direct booking promotions

"The current hotel distribution model has a shelf-life, and I believe we've come to the point where it has expired." - Duncan McKenna, Co-founder of hoo

The Extra Costs You Don't See

OTA programs come with more fees:

Program	Extra Cost	Impact
Booking.com Genius	+10%	Total commission up to 28%
Preferred Partner	+3-5%	Higher visibility placement
Smart Flex	Up to 34%	Flexible cancellation options

The Numbers Tell the Story:

U.S. hotels spend $10B+ yearly on OTA commissions
63% of bookings happen online
Booking.com gets 100M+ monthly visitors

Small hotels feel these costs the most. But with OTAs spending billions on marketing and controlling most online bookings, they're almost impossible to avoid.

2. Direct Hotel Bookings

Here's what hotels make when guests book directly vs through OTAs:

Booking Type	Revenue on $100 Room	Marketing Costs	Net Profit
Direct Website	$100	$5-10	$90-95
Phone/Email	$100	$2-5	$95-98
Walk-in	$100	$0	$100

The numbers tell a clear story: direct bookings put more money in hotels' pockets.

What Direct Bookings Look Like By The Numbers

Metric	Performance
Website Conversion Rate	1.5-2.5%
Newsletter to Booking Rate	5%
Bookings per 1000 Visitors	5-20
Mobile Booking Growth	20% YoY

Real-World Success Stories

Want proof? Hotel Kragemann boosted direct bookings by 15% just by upgrading their booking engine. Even bigger: Marriott's Bonvoy program drove a 70% jump in direct app bookings while reducing OTA dependence.

Here's what hotels get (and give up) with direct bookings:

Pros	Cons
Full guest data access	Need marketing budget
More profit per booking	Website upkeep costs
Control over pricing	Less initial reach
Direct guest relationships	Slower traffic growth

Making Direct Bookings Pay Off

What works for getting more direct bookings?

Booking engines that work on phones
Showing up in Google Hotel Search
Rewards programs with real perks
Emails before guests arrive
Price matching guarantees

The stats back this up: 15% of guests add extras when booking direct. Early bookers are 3x more likely to buy add-ons. And hotels that show lots of photos get 225% more booking requests.

Need a low-risk way to boost direct bookings? Tools like Sail offer AI marketing across Facebook, Instagram, and hotel search sites - you only pay when you get bookings.

Latest Numbers (2022-2023)

Channel	Booking Share
OTAs	57%
Direct + Other	43%
Metasearch Growth	+41% vs 2019

Bottom line: Hotels need both direct and OTA bookings. The key? Cut commission costs by getting more direct bookings through smart marketing.

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OTAs vs Direct Bookings: Key Differences

Here's what you need to know about OTAs and direct bookings:

Category	OTAs	Direct Bookings
Commission Costs	15-30% per booking	$0 commission
Marketing Investment	OTA handles it	$5-10 per booking
Customer Data Access	Limited	Full access
Booking Process	One-click comparison	Hotel-specific
Loyalty Programs	Not available	Full benefits
Market Reach	Global audience	Limited reach

The Money Side Big OTAs (Expedia, Booking Holdings, Airbnb, Trip.com) spent $14 billion on marketing in 2022. That's why they're everywhere - but hotels pay for this visibility through high commissions.

Cost Breakdown	OTA Bookings	Direct Bookings
Getting New Guests	6.5x higher	Base cost
Marketing Budget	Part of commission	You control it
Money From $100 Room	$70-85	$90-100

What Guests Want Here's what the numbers tell us:

39% of UK guests book directly
17% pick OTAs
60% have switched from OTAs to direct booking

"I prefer booking directly - it cuts out the middleman. When there's a schedule change, the carrier contacts me right away." - Kathy Lopez, Author

The Numbers Game

Channel	Market Share	What's Happening
OTAs	45% of European travel	Going down
Direct	Popular with small hotels	Going up
Booking.com Genius	45% more bookings	40% more money

Price Control Hotels have more options with direct bookings:

Strategy	With OTAs	Direct Booking
Rate Control	Contract limits	More freedom
Package Deals	Less control	Full control
Special Offers	Platform rules apply	No limits
Extra Services	Extra fees	Keep all profit

Small hotels can compete with OTAs using tools like Sail, which offers pay-per-booking ads on Facebook and Instagram - keeping costs down while reaching more guests.

Conclusion

Hotels need both OTAs and direct bookings to maximize their revenue. Here's what works:

Strategy	Action Steps	Expected Results
OTA Listings	Get on Expedia and Booking.com	Tap into $14B marketing power
Direct Bookings	Show price comparisons, add perks	Cut costs by 15-30%
Email Follow-up	Connect with OTA guests	Turn them into direct bookers
Better Website	Make booking easy on all devices	More conversions

Mix Your Channels

Channel Split	What You Get	How to Do It
50% Direct	Keep guest data and profits	Set up booking engine and rewards
50% OTA	Fill rooms worldwide	Stay visible, match prices

Hotels That Got It Right

Hotel	What They Did	What Happened
Pacifica Hotels	Combined booking system with rewards	31,000+ members booked in 1 year
Hilton EMEA	Ran "Stop Clicking Around" ads	Direct bookings up 27%
Amrâth Hotels	Added 22% off for direct deals	Big jump in direct sales

Small hotels: Try Sail's pay-per-booking social media ads to compete with OTAs without breaking the bank.

Make It Work

Build a simple booking process
Give direct bookers extra value
Keep your prices in sync
Let software handle your channels
Watch where bookings come from

Here's something interesting: 65% of direct bookers first spot hotels on OTAs (Otamiser data). That's why smart hotels don't pick sides - they use BOTH channels to win.

FAQs

Why do hotels work with OTAs?

Hotels team up with OTAs for two simple reasons:

Reason	Benefit
Market Reach	Gets hotels in front of global travelers
Revenue Fill	Helps sell empty rooms in slow seasons

Here's the deal: OTAs take a 10-30% cut, but they connect hotels with guests they'd never reach on their own. Numbers don't lie - a 2021 study shows that while 39% of people book direct, OTAs still bring in lots of first-time guests.

What is rate parity for hotels?

Think of rate parity as a price-matching game. Your room costs the same no matter where someone books it:

Channel	Must Match Price
Hotel Website	Base price
OTAs	Same as website
GDS Systems	Same as website

How to maintain rate parity?

Here's what hotels do to keep their prices in sync:

Step	Action	Purpose
Monitor Channels	Daily price checks everywhere	Catch problems fast
Update Software	Use modern channel managers	Stop tech glitches
Fix Tech Issues	Solve booking engine problems	Keep data moving
Watch Wholesalers	Stop package rates hitting OTAs	Block price leaks

Let's make this super clear: If you list a room for $150 on Booking.com, it MUST cost $150 everywhere else - Expedia, your website, everywhere. This keeps guests happy and follows OTA rules.