Direct bookings vs OTAs: what each booking really costs a small hotel or winery

A direct booking is cheaper than an OTA booking only when what you spend to win it stays below the commission. Booking.com, Expedia, Viator and GetYourGuide commonly take 15 to 30% of the booking. Direct bookings aren't free, but for guests who already know your name they usually cost far less.

So the real question isn't direct or OTA. It's which guests you're paying a commission on that you could have had for less.

What does an OTA booking actually cost?

More than the commission line on the invoice.

• The commission. Hotels commonly report around 15 to 25% on Booking.com and Expedia, depending on country and programme. Tour and tasting operators commonly report 20 to 30% on Viator and GetYourGuide. Visibility boosters and preferred programmes add to that.
• The guest relationship. The OTA owns the email, the follow-up and the next trip. A guest who loved your tasting room is a Booking.com customer first and yours second.
• Your own name. OTAs bid on hotel names in Google Ads, and tour platforms do the same with attraction and experience names. When someone searches for you by name and clicks the OTA ad at the top, you pay a commission on a guest who was already looking for you.

That last one is the most expensive booking you'll ever take, because it was already yours.

What does a direct booking cost?

Direct bookings have their own costs. Count them honestly or the comparison means nothing.

• The booking engine. Mews, Cloudbeds, FareHarbor, Tock or similar, usually a monthly fee or a small per-booking fee.
• Payment fees. Card processing, typically a few percent.
• What brought the guest. Ads, metasearch, email, the time spent on your site and social channels.

Here is the simple test I use. Take your average booking value and multiply it by the OTA commission. That's what an OTA booking costs you. Then take your spend on a direct channel and divide it by the bookings it brought. If the second number is lower, that channel is beating the OTA.

For example, on a €200 room night at 18% commission, the OTA costs €36. If a brand search campaign costs €12 per booking, every guest it brings home saves you €24.

You can only run that test if you can see which bookings came from which channel. If your booking engine sits on another domain, read how to track bookings from your ads first.

The billboard effect: OTAs also send you direct bookings

Leaving the OTAs to save commission often backfires. Many travellers find a hotel on an OTA, then search its name and book on its own site.

A Cornell study by Chris Anderson called this the billboard effect: hotels listed on Expedia got more direct reservations than when they weren't listed. The OTA works as advertising you only pay for when the booking stays on the OTA.

That changes the goal. You don't want fewer OTA listings. You want the travellers who see you there to find a good reason to book with you instead.

When is the OTA the better deal?

More often than direct-booking evangelists admit.

• New and long-haul markets. A traveller in Chicago planning a week in Portugal starts on an OTA. Reaching them alone with ads costs more than the commission.
• Low season and last-minute gaps. An empty room or an empty tasting slot earns nothing. Paying a commission to fill it is a good trade.
• Groups and tour operators that only buy through platforms.
• Trust. A first-time guest may not book a small estate they've never heard of, but will book it through a brand they already use.

Treat OTAs as a channel you open and close by season and market, not a switch.

How to shift the mix towards direct

Most of the gain comes from guests who already know you. In order:

1. Protect your own name. Run a small brand search campaign on Google so your site sits above the OTA ad when people search for you. It's usually the cheapest booking you'll buy.
2. Use Google's free booking links. Hotels and things-to-do operators can show their own booking link next to the OTAs in Google search and Maps through a connected booking engine or channel manager.
3. Never be more expensive direct. In the EU, the Digital Markets Act stopped Booking.com from enforcing price parity clauses, so you are free to price your own site lower. Even if you keep the same price, add a small reason to book direct: a welcome glass, late checkout, a free tasting upgrade.
4. Make the booking page work on a phone. Few steps, live availability, clear prices, and no PDFs.
5. Capture the guest. Email or WhatsApp at booking and at check-in, so the second visit is direct.
6. Retarget people who visited and left. Meta and Google can bring back the people who checked your prices and went to compare.

The machine-readable side matters more every year. AI travel assistants recommend what they can read and book. I wrote about that shift in will AI travel agents replace OTAs?.

Where to start

Pull last year's bookings by channel and work out what you paid in commission. Then check how many of those guests searched for your name first. That number tells you how much direct demand you're already paying an OTA to collect.

That's the first thing I look at with boutique hotels and wineries. If you want a second pair of eyes, I start with a free audit of your ads, tracking and direct booking path.