Agent commissions typically range from 8-30% but the major online travel agencies (OTA’s) tend to offer 15-18% as standard. The commission is usually charged on the booking value inclusive of commission therefore the actual cost is higher. OTA’s are now an established way of life and you will notice very few highly successful brands have managed to avoid them altogether.

Despite improvements in recent years very few direct booking experiences quite measure up. So, for most hoteliers, OTA commissions seem unavoidable but is this really such a bad place to be? For one, it certainly makes life easy – once systems are connected, real time rates are available and accessible worldwide to an audience reaching far beyond the realms of possibility in pre-OTA times.  Bookings pop directly into the property management system (PMS) and very little human intervention is required.

In a world without OTA’s, marketing would really have to step up its game to achieve similar levels of bookings and of course, this does not come for free – campaigns require considerable investment in time and money and have less than predictable results.

From a revenue management perspective, OTA’s at least generate are fairly predictable volume at a predictable cost and direct promotions are often based on fixed rates and unknown volumes so they can be harder to yield effectively.

Let’s face it, we are never going to win the SEO war with OTA’s. Unless you own one of a handful of truly iconic brands with a waiting list of guests, the OTAs are a fact of life. The focus should be on getting your fair share of direct business and not handing it to them on a platter.  

Here are four targets we recommend you stand by:

1. Make sure your direct booking experience (on and offline) measures up.

2. Make sure it is NEVER cheaper to book via an OTA and don’t fall into the OTA traps designed to achieve this.

3. Give guests genuine benefits of booking direct and shout them from the rooftops

4. Only pay what you owe – many hotels overpay commissions through poor practice

VROOM can help evaluate how you perform in these four key areas and can offer solutions to make sure you really are getting your fair share.

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