Picture this: a traveler types your hotel’s name into Google, ready to book directly. They’ve done their research, they’re sold on your property, and now they just need to reserve their stay. But instead of your website at the top of the search results, they see an Online Travel Agent (OTA) offering a lower price for the same room. Naturally, they click on the OTA. And just like that, a direct booking turns into a third-party one – costing you commission, guest data, and control over the booking experience. This scenario plays out daily across the industry, and it has a real impact on profitability.
We recently tracked over 27 million Cost Per Click (CPC) impressions and found that, when a hotel permits an OTA to undercut their own direct rate, the hotel ends up paying 47% more per click for its own brand name in paid search campaigns. Why does this happen? It all comes down to pricing power. Travelers are trained to book wherever they find the best rate, and OTAs know this better than anyone. If they can offer a lower price than your direct site, they’ll go all in — bidding aggressively on your brand name because they know the lower rate will convert more clicks into bookings. But all this means is that you’re stuck in a bidding war just to stay visible on your own name.
Even if you match OTA rates (a strategy known as rate parity), you’re still not off the hook. Hotels that keep pricing the same across OTAs and direct channels still see their CPC climb by nearly 36% compared to hotels that ensure their direct rate is the lowest. That’s because when prices are identical, OTAs still have every reason to bid on your brand, knowing they have a strong chance of winning the booking. And once that dynamic is in play, your marketing spend goes up whether you like it or not. Month after month, these higher costs divert funds that might have been better spent on guest engagement, loyalty programs, and remarketing.
Now, let’s be clear: OTAs aren’t the bad guys here. They provide valuable exposure, help fill rooms in slow periods, and cater to a massive audience of travelers who rely on them to compare options. The problem isn’t their existence — it’s the hidden cost of giving them too much control over pricing. The moment they offer a cheaper deal, hotels aren’t just handing over more bookings to third parties, they’re also paying more to compete for guests who should have been easy, low-cost wins.
The key is striking a mutually beneficial balance. Hotels that let OTAs run wild with lower prices sacrifice both direct conversions and marketing spend. Those that insist on a direct channel advantage, on the other hand, can still benefit from an OTA’s reach while protecting their own brand.
That’s where rate integrity comes in. When travelers consistently see that your website has the best price, they stop hunting for a better deal elsewhere. They trust your direct channel and book without hesitation. More importantly, when OTAs can’t undercut you, they have less incentive to bid aggressively on your brand, which helps keep CPC in check. It’s a simple shift, but one that can have a massive impact — not just on marketing spend, but on long-term guest loyalty.
Beyond just saving on ad costs, prioritizing direct rates strengthens your relationship with guests. When bookings come through your website, you own the guest experience from start to finish. You can offer loyalty perks, capture email addresses for future marketing, and build a connection that extends beyond a single stay. When OTAs control the booking, they own that relationship, making it harder to bring guests back on their next trip.
And here’s something to think about: the future is shifting toward more direct bookings. Industry data suggests that, by the end of this decade, hotels could see more reservations coming through their own channels than through OTAs. That means hotels that get serious about rate integrity now will be in the best position to benefit. Keeping your direct price as the most attractive option isn’t just about today’s CPC savings — it’s about future-proofing your business in a world where direct relationships will matter more than ever.
OTAs will always be an important part of the distribution mix. They offer scale, visibility, and convenience for travelers, and they can complement a hotel’s marketing efforts. But that’s just it — they should complement, not overwhelm. The strongest approach is one that keeps OTAs as valuable partners while ensuring that direct bookings remain the best and most cost-effective option for both the hotel and the guest.
