Direct bookings
Direct Booking vs OTA: Which Costs Your Hotel Less?
Neither is always cheaper. An OTA booking costs the contracted commission in your agreement. A direct booking costs payments, marketing, technology and service. So compare the same stay in both channels with your own numbers. To get more direct bookings, give guests a clear reason to book on your own site. Direct guests can also join a list you're allowed to write to again.
What does an OTA booking really cost?
An OTA booking costs whatever your own agreement says. That means the commission plus the program terms. A direct booking costs something too, just in a different mix of payments, marketing, technology and service. The honest comparison starts from your actual contracts and channel costs. No universal percentage will do. Direct bookings can also make it easier to build a guest list you're allowed to write to for future stays.
How do you compare the same stay in both channels?
Use the same dates, room type, inclusions and cancellation conditions. If the offers differ, the comparison misleads.
| Cost or value | Direct booking | OTA booking |
|---|---|---|
| Booking revenue | Use one revenue basis for both | Use the comparable booking value |
| Commission or marketplace fees | Include any fees that apply | Use your actual agreement |
| Payment processing | Enter the real cost | Add any costs not already counted above |
| Acquisition | Count the advertising that brought the booking in | Count paid programs where they apply |
| Booking technology | Share out the cost of the tools | Add the costs that belong to that channel |
| Staff handling | Estimate the time the same way each time | Use the same method |
| Channel contribution | Revenue minus the costs above | Revenue minus the costs above |
Count each cost once. Keep fixed costs apart from the costs that change with each booking, and use the same period for both channels.
What the platforms report, and why it is not your rate
The only commission number that belongs in your calculation is the one in your own agreement. One public figure is still worth knowing, because it shows how far a platform-wide average sits from a single room night.
Expedia Group reports a metric it calls total revenue margin, which is its revenue as a share of gross bookings. It reported 12.3% in each of 2023, 2024 and 2025, on USD 119.6 billion of gross bookings in 2025. Its consumer segment margin was 11.3%.
That's lower than the commission most independent hotels pay on a room night, and it isn't a commission rate. Three things pull it away from your number. It blends flights and rental cars, which carry thinner margins than accommodation. It blends business-to-business volume. And it includes advertising revenue with no booking behind it, which is why Expedia's own segment margins don't add back to its reported total.
Treat it as background. Don't use it as a benchmark. Read your contract instead.
Source: Expedia Group 10-K for 2025, filed 13 February 2026, figures as filed, read 20 September 2026. Booking Holdings publishes gross bookings and revenue but no comparable margin, so no rate for it appears here.
Avoiding commission doesn't automatically make every direct booking more profitable. If direct acquisition costs more than the commission it replaces, the direct route brings in less.
Why is a direct guest worth more than the margin?
A direct booking can give you a closer relationship with the guest. But having a contact detail isn't the same as having permission to market. You may collect the guest's details in your own booking flow, yet future outreach still depends on the consent, purpose and regional rules attached to that data. OTAs share data differently by platform and by booking. So compare two things. One is the channel cost. The other is what a relationship the guest has really agreed to is worth.
What shifts bookings from OTAs to direct?
Make the direct path worth using. Then test it on guests you can lawfully contact. Here are some plays to try:
- A real reason to book directA better rate, a room upgrade or a perk that fits your channel terms. A pre-arrival upsell can carry the upgrade offer once the booking exists.
- An explicit signup at useful touchpointsRecord contact details and marketing permission as two separate things, for inquiries, walk-ins and past guests.
- An invitation for eligible past guestsWhere permission and the relationship allow it, give a past guest a clear direct path to a future stay. See hotel guest reactivation.
- A booking flow that works on a phoneTake the friction out for guests who research or book on mobile.
If you need a booking engine for your own site, BNBForms is one low-cost option. Its site lists a PMS, dynamic pricing and a channel manager in one tool. It costs $16 a month after a free first month, for unlimited properties and bookings, and it takes no commission on bookings.
Where does automation fit in direct booking?
Automation can help with direct bookings, as long as it only touches guest data you're allowed to use. Think of reactivating eligible past guests, following up on inquiries and pointing repeat guests to your booking flow. A BonsAI Luxury implementation is configured around the property's consent records, approval rules and booking system. See AI automation for boutique hotels.
Unsure which channel costs you more? Get your free AI audit. Bring one anonymized booking example and your cost categories.
Sources
- Expedia Group fourth quarter and full year 2025 results, Expedia Group, filed with the SEC.
- Expedia Group annual report (Form 10-K) for 2025, Expedia Group, filed with the SEC.
- How we work, Booking.com.
- List your property: frequently asked questions, Booking.com.
Frequently asked questions
How much commission do OTAs charge hotels?
Commission varies by platform, program, market and your own agreement. Compare the actual OTA contract with the full cost of direct booking, including payments, marketing, booking technology and service.
Are direct bookings really cheaper than OTA bookings?
Sometimes. The honest comparison counts payment, marketing, booking technology, service and OTA contract costs. A direct booking may also give you the guest's contact details, but you can only market to them later if you have valid permission. That doesn't come automatically.
How do boutique hotels get more direct bookings?
Give guests a clear reason to book direct, like a better rate or a perk. Capture the email at every touch, make the booking flow fast on mobile and reactivate past guests to your own site. Automation makes the reactivation and follow-up happen the same way every time.
Should a boutique hotel stop using OTAs entirely?
No. OTAs are good for discovery and for filling gaps. The aim is to move repeat and reachable guests to direct, so you stop paying commission on guests you could reach yourself.