Reducing OTA commissions for hotels is the most direct lever for improving your margin per booking. The most effective approach combines a commission-free booking engine, a consistent pricing policy and a loyalty strategy that encourages direct bookings. Applying these three levers together can significantly lower your distribution costs without losing visibility.
Why is reducing OTA commissions a revenue manager's top priority?
OTA commissions typically range from 15% to 25% per booking. That percentage comes straight out of your profit. A hotel turning over €200,000 a year through intermediaries could be paying more than €40,000 in commissions.
Reducing that dependence doesn't mean leaving the OTAs; it means balancing your distribution mix. The key is to grow the direct channel without losing the exposure that online agencies provide. That requires a pricing and marketing strategy that rewards booking on the hotel's own website.
Revenue management strategies to lower OTA commissions
1. Set a consistent pricing policy
If your OTA rate is cheaper than your website, guests have no incentive to book direct. Quite the opposite: if you offer the same or a better price on your direct channel, you gain margin and capture customer data.
An effective technique is rate parity with a direct advantage: keep the same public rate but add exclusive benefits on your booking engine, such as late check-out, a welcome drink or an upgrade subject to availability.
2. Use a commission-free booking engine
Every direct booking that comes through your website pays no commission. With a commission-free booking engine, you turn the traffic you already have into net revenue. What's more, by controlling the payment process, you reduce cancellations and no-shows with automatic charges.
3. Build guest loyalty to encourage repeat stays
Acquiring a new customer costs far more than retaining an existing one. Post-stay email marketing, personalised offers and a simple loyalty programme all work well. If the guest books direct again, you pay no commission.
Avirato includes hotel loyalty tools that increase direct bookings, with email automations and customer segmentation.
Comparison table: sales channels and real cost
| Channel | Typical commission | Acquisition cost | Control over the customer |
|---|---|---|---|
| Main OTA (Booking, Expedia) | 15-25% | High (depends on visibility) | Low (limited data) |
| Direct website with booking engine | 0% | Medium (marketing investment) | High (full data) |
| Phone or email | 0% | Low (if there is demand) | High (personal relationship) |
The table shows why the direct channel is the most profitable. The challenge lies in driving traffic to your website. OTAs are still necessary to capture new demand, but their weight should be reduced progressively.
How Avirato helps reduce OTA commissions for hotels
Avirato unifies PMS, channel manager and booking engine in a single platform. This enables a centralised pricing strategy: you set a rate, sync it to all channels and apply restrictions automatically.
The commission-free booking engine is integrated with the PMS, which eliminates availability errors and allows you to apply upsells and cross-sells during the booking process. In addition, the email marketing and loyalty tools help capture repeat bookings, reducing reliance on intermediaries.
Practical steps to get started
- Audit your current channel mix and calculate the real cost of commissions.
- Implement a booking engine on your website with competitive prices.
- Set up a post-stay email marketing strategy.
- Offer exclusive benefits to direct customers (late check-out, welcome drink).
- Monitor the percentage of direct bookings monthly and adjust.
Is it possible to eliminate OTAs completely?
In most cases it's not advisable. OTAs provide global visibility and capture demand from people who don't know your hotel. The goal is to reduce their weight to the minimum necessary, not to eliminate them.
How much can I save with a direct booking strategy?
It depends on your current volume and mix. If 70% of your bookings currently come from OTAs and you manage to bring that down to 50%, the savings in commissions can be very significant. A hotel with €100,000 in OTA bookings a year would pay between €15,000 and €25,000 in commissions; going down to 50% would save half that amount.
Which is better: lowering OTA rates or maintaining parity with direct benefits?
Maintaining parity with direct benefits is more sustainable. Lowering OTA rates reduces your margin and can spark a price war. By contrast, offering added value on your website doesn't erode the public rate and rewards the direct customer.
Conclusion: fewer commissions, more margin
Reducing OTA commissions for hotels isn't magic; it's method. It requires a commission-free booking engine, a consistent pricing policy and an active loyalty strategy. With Avirato you can centralise these levers on a single platform and regain control of your distribution.
Request a free Avirato demo and discover how to reduce your OTA commissions with an integrated PMS, channel manager and booking engine.
Frequently asked questions
What are OTA commissions and how do they affect my hotel?
OTA commissions are the percentage that online agencies (such as Booking or Expedia) charge for each booking generated through their platform. They typically range from 15% to 25% of the booking value, which directly reduces the hotel's profit margin. Reducing reliance on these commissions is key to improving profitability.
How can I reduce OTA commissions without losing visibility?
The most effective strategy is to increase the percentage of direct bookings through a commission-free booking engine integrated into your website, offer exclusive benefits to direct customers (such as late check-out or upgrades) and build guest loyalty so they return. It's not about eliminating OTAs, but about balancing your distribution mix.
What role does revenue management play in reducing commissions?
Revenue management allows you to control prices and availability across all channels. By maintaining rate parity with direct benefits, you encourage bookings on your website. You can also apply restrictions and selective promotions to maximise net revenue per room, reducing reliance on intermediaries.
How does Avirato help reduce OTA commissions?
Avirato integrates a commission-free booking engine, a channel manager with instant synchronisation and email marketing and loyalty tools. This allows you to centralise your distribution strategy, capture more direct bookings and automate campaigns to encourage repeat customers, all from a single platform.