10 Minutes News for Hoteliers 10 Minutes News for Hoteliers
  • Top News
  • Posts
    • CSR and Sustainability
    • Events
    • Hotel Openings
    • Hotel Operations
    • Human Resources
    • Innovation
    • Market Trends
    • Marketing
    • Mergers & Acquisitions
    • Regulatory and Legal Affairs
    • Revenue Management
  • 🎙️ Podcast
  • 👉 Sign-up
  • 🌎 Languages
    • 🇫🇷 French
    • 🇩🇪 German
    • 🇮🇹 Italian
    • 🇪🇸 Spain
  • 📰 Columns
  • About us
10 Minutes News for Hoteliers 10 Minutes News for Hoteliers 10 Minutes News for Hoteliers
  • Top News
  • Posts
    • CSR and Sustainability
    • Events
    • Hotel Openings
    • Hotel Operations
    • Human Resources
    • Innovation
    • Market Trends
    • Marketing
    • Mergers & Acquisitions
    • Regulatory and Legal Affairs
    • Revenue Management
  • 🎙️ Podcast
  • 👉 Sign-up
  • 🌎 Languages
    • 🇫🇷 French
    • 🇩🇪 German
    • 🇮🇹 Italian
    • 🇪🇸 Spain
  • 📰 Columns
  • About us

Are OTA Commissions Worth It? That Depends Entirely on Context. A recent… | Tata Graham Crocombe

  • Tata Graham Crocombe
  • 25 March 2025
  • 2 minute read
Total
0
Shares
0
0
0

This article was written by a Hotel Marketing Flipboard. Click here to read the original article

image

Are OTA Commissions Worth It? That Depends Entirely on Context.

A recent Cornell study claims that every $1 paid in OTA commission yields $20.20 in revenue, $7.08 in profit, and a 1.12% occupancy boost. Impressive on paper—but not every dollar of revenue is created equal.

Whether OTA bookings are worth the cost comes down to one word: incrementality.

Let’s break it down with two scenarios:

🔹 Hotel A: 40% occupancy, below breakeven

If the hotel can’t fill more rooms directly, an OTA booking—even with a 15–20% commission—is mostly incremental. It helps cover fixed costs and move toward profitability. Here, that OTA dollar is valuable.

🔹 Hotel B: 80% occupancy, above breakeven

This hotel may have filled more rooms via direct channels anyway. An OTA booking now might just replace a higher-margin direct booking. In this case, the OTA commission isn’t a necessary cost—it’s a margin leak.

The same OTA booking has two very different impacts depending on the hotel’s situation. This is why broad-brush averages like Cornell’s can be misleading when used for strategic decision-making.

Hotels must ask:

✅ Is this OTA booking truly additive, or would I have received it directly?
✅ What’s my breakeven occupancy?
✅ Do I have untapped direct demand?

Benugo reports highest turnover in 25-year history
Trending
Benugo reports highest turnover in 25-year history

If the answer is that the OTA is just inserting itself between you and a guest who was already going to book with you, then that commission is a wasted cost—not an investment.

And while OTAs can play a key role in expanding reach, over-reliance on them undermines profitability.

Max Starkov rightly highlight the $50B+ hotels pay OTAs each year—money that could be reinvested in direct booking tools, guest loyalty, staff training, or product upgrades.

The smartest hoteliers use OTAs tactically, not dependently:

To fill need periods
To access markets they can’t reach directly
To attract first-time guests (and then convert them to direct bookers)

But the endgame should always be: Grow direct. Reduce dependence. Own the guest relationship.

So, are OTA commissions worth it?

Only when they bring you bookings you couldn’t have secured yourself. Otherwise, you’re just trading profit for convenience—and that’s rarely a winning long-term strategy.

Please click here to access the full original article.

Total
0
Shares
Share 0
Tweet 0
Pin it 0
You should like too
View Post
  • Marketing

MyBoutiqueHotel Choose Influence Society to Accelerate Global Growth of Curated Boutique Collection

  • 10minhotel
  • 9 September 2025
View Post
  • Marketing

How Hotels Can Harness Social Media to Drive Real Business Value

  • Automatic
  • 8 September 2025
View Post
  • Marketing

🚨 Why the sudden and more aggressive push for “Rate Parity” from the major OTAs? Short answer: they might be freaking out. Here’s why 👇 Gary Vee said something recently that clicked for me: AI… | Josh Guerra

  • Josh Guerra
  • 5 September 2025
View Post
  • Marketing

eDreams ODIGEO subscriber base hits 7.5…

  • Travel Weekly Group Ltd
  • 5 September 2025
View Post
  • Marketing

The Real Story Behind Airbnb’s 15.5% Fee Hike

  • Chris MAUGHAN
  • 3 September 2025
View Post
  • Marketing

AirBnB (yellow) vs. Booking.com (green) Airbnb has a weird problem: it’s both too big and too fragile. On the one hand, second-quarter revenue rose 13% to $3.1 billion, and profits beat… | Sorin Anagnoste

  • Sorin Anagnoste
  • 3 September 2025
View Post
  • Marketing

The Untapped Goldmine: Why Regional OTAs Could Be Your Hotel’s Secret to Higher Occupancy

  • Nashi Dasgupta
  • 3 September 2025
View Post
  • Marketing

Whenever I start working with a hotel, I don’t begin by looking at their follower counts or ad spend. I start by asking the marketing team 5 questions. These 5 questions tell me everything I need to… | Scott Eddy | 45 comments

  • Scott Eddy
  • 2 September 2025
Sponsored Posts
  • 2025 SOCIETIES Quaterly 3

    View Post
  • The Future of Revenue Management Is Strategic Leadership – LodgIQ

    View Post
  • Case Study: Refinery Hotel Redefines Revenue Management with LodgIQ

    View Post
Latest Posts
  • Canary Technologies Marks Housekeeping Week with Over 3X Growth in Digital Tips to Hotel Staff
    • 10 September 2025
  • Morimoto Asia introduces passport-style loyalty program for 10th anniversary
    • 10 September 2025
  • Up in the air, loyalty on the ground: A conversation with Ellis Connolly
    • 10 September 2025
  • Canary Technologies Releases Data Highlighting Housekeeper Appreciation
    • 10 September 2025
  • The eSIM perk: Connectivity as a new conversion-boosting benefit for hotels
    • 10 September 2025
Sponsors
  • 2025 SOCIETIES Quaterly 3
  • The Future of Revenue Management Is Strategic Leadership – LodgIQ
  • Case Study: Refinery Hotel Redefines Revenue Management with LodgIQ
Contact informations

contact@10minutes.news

Advertise with us
Contact Marjolaine to learn more: marjolaine@wearepragmatik.com
Press release
pr@10minutes.news
10 Minutes News for Hoteliers 10 Minutes News for Hoteliers
  • Top News
  • Posts
  • 🎙️ Podcast
  • 👉 Sign-up
  • 🌎 Languages
  • 📰 Columns
  • About us
Discover the best of international hotel news. Categorized, and sign-up to the newsletter

Input your search keywords and press Enter.