7 Benefits of OTAs for Hotels (+ 3 Hidden Disadvantages to Watch Out For)

Quick Answer: OTAs (Online Travel Agencies) help hotels reach millions of travelers, increase bookings, build trust, and grow without upfront marketing costs. But commission fees (15–25%) and dependency risks need smart management.

If you're a hotel owner in India wondering whether listing on MakeMyTrip, Goibibo, Booking.com, or other OTAs is worth it, this guide breaks down the real benefits and the hidden pitfalls you should watch out for.

What Are OTAs and Why Do Hotels Use Them?

OTA stands for Online Travel Agency — digital platforms where travelers search, compare, and book hotels online.

Popular examples in India:

• MakeMyTrip

• Goibibo

• Booking.com

• Agoda

• Cleartrip

• Expedia

• Yatra

OTAs act like a bridge between your hotel and millions of online travelers. You list your property, they send you bookings, and you pay a commission (typically 15–25% in India).

But are they worth the commission? Let's look at the benefits first.

7 Major Benefits of OTAs for Indian Hotels

1. Instant Visibility to Millions of Travelers

The Benefit: OTAs already have massive traffic. MakeMyTrip and Goibibo alone see 26 crore visitors per month from India.

When you list on an OTA, your hotel immediately appears in front of travelers who are actively searching for accommodation. No need to wait months for your own website to rank on Google.

Real Impact:

• A new hotel in Goa can start getting bookings within 24 hours of listing on Booking.com

• Small properties in tier-2 cities get discovered by travelers who'd never find them otherwise

• You tap into audiences you can't reach alone—international guests, last-minute bookers, mobile-only users

Why This Matters: Building this kind of reach on your own would cost lakhs in Google ads and SEO work. OTAs give you instant distribution.

2. Zero Upfront Marketing Costs (Pay Per Booking)

The Benefit: Unlike Google Ads or Facebook campaigns where you pay upfront (whether you get bookings or not), OTAs work on a commission-only model.

You only pay when a confirmed booking happens.

Real Impact:

• No monthly retainer fees

• No wasted ad spend on clicks that don't convert

• Risk-free way to test new markets

• Perfect for hotels with tight marketing budgets

Example: If your room rate is ₹3,000 and the OTA commission is 20%, you pay ₹600 only when the booking is confirmed. No booking = no payment.

3. Built-in Trust and Credibility

The Benefit: Travelers trust OTA platforms more than unknown hotel websites—especially when booking online for the first time.

Why?

• Secure payment gateways

• Clear cancellation policies

• Verified reviews from real guests

• Easy refund process if something goes wrong

Real Impact:

• First-time online bookers feel safer using MakeMyTrip than paying directly to a hotel website they've never heard of

• International travelers prefer Booking.com because they trust the brand

• Guest reviews on OTAs act as social proof and drive more bookings

Bottom Line: OTAs reduce the "trust barrier" that stops many travelers from booking directly with small or new hotels.

4. Access to Smart Tools and Technology

The Benefit: OTAs provide hotels with booking technology, payment processing, analytics dashboards, and mobile app exposure—things that would be expensive to build yourself.

What You Get:

• Real-time inventory management

• Automated booking confirmations

• Guest communication tools

• Performance analytics (which dates get most searches, where your guests come from)

• Mobile app presence (millions of people book on mobile apps)

Real Impact: Even if you don't have your own website or booking system, you can still sell rooms professionally through OTA platforms.

5. Promotions, Discounts, and Visibility Boosts

The Benefit: OTAs run campaigns and offer deals that drive extra bookings to your property often at no additional cost to you.

Examples:

• MakeMyTrip's "Coupons" and member-only discounts

• Booking.com's "Genius" program for frequent travelers

• Flash sales during festive seasons

• "Last Minute Deals" that fill empty inventory

Real Impact:

• You get featured in promotional emails sent to millions of travelers

• Time-sensitive deals create urgency and boost conversions

• OTAs highlight your property during high-demand periods

Key Point: These promotions help you compete against bigger hotels without spending extra on your own marketing.

6. Reviews Build Your Reputation

The Benefit: Guest reviews on OTA platforms are visible, verified, and help future travelers make decisions.

Why This Matters:

• Positive reviews increase your bookings (hotels with 8+ ratings get 3x more clicks)

• Reviews give you feedback to improve service

• High ratings improve your search ranking on the OTA platform

• Reviews work 24/7 as free marketing for your property

Real Impact: A small homestay in Coorg with 50+ positive reviews on Booking.com will outperform a bigger resort with no reviews.

Pro Tip: Respond to every review (good or bad) — it shows you care and builds trust with future guests.

7. Global Reach and International Bookings

The Benefit: Platforms like Booking.com, Agoda, and Expedia have a global audience. Even if you're a small hotel in Udaipur or Munnar, you can get bookings from travelers in Europe, USA, Southeast Asia, and the Middle East.

Real Impact:

• Diversify your guest mix (not just domestic travelers)

• Fill low-season periods when Indian tourists aren't traveling

• Get higher-paying international guests who book longer stays

Without OTAs: Reaching international travelers would require multilingual websites, international payment gateways, and global marketing—expensive and complex for small hotels.

3 Hidden Disadvantages of OTAs You Should Know

OTAs are powerful, but depending only on them can hurt your business in the long run. Here are the real risks:

1. Commission Costs Eat Into Your Profits

The Problem: OTA commissions in India range from 15% to 25% per booking.

Real Impact:

• If your room rate is ₹4,000 and commission is 20%, you only receive ₹3,200

• On a ₹10,000 booking, you lose ₹2,000 to commission

• High commission reduces your profit margin, especially for budget hotels

Example Calculation:

Booking SourceRoom RateCommissionYou ReceiveOTA Booking₹4,000₹800 (20%)₹3,200Direct Booking₹4,000₹0₹4,000

The Hidden Cost: Over 100 bookings, you're giving away ₹80,000 in commissions.

Solution: Use OTAs for visibility, but also invest in direct bookings through your own website, Google My Business, and social media.

2. You Lose Guest Data and Direct Relationships

The Problem: When a guest books through an OTA, the platform owns the customer relationship—not you.

What This Means:

• You don't get the guest's email or phone number (OTAs hide it)

• You can't send them offers for their next visit

• You can't build a loyal customer base

• Guests might rebook through the OTA instead of calling you directly

Real Impact: You're constantly finding new guests instead of earning repeat bookings from happy customers. This is expensive and inefficient.

Solution: When guests check in, collect their contact details (with permission) and stay in touch via WhatsApp, email newsletters, or loyalty programs.

3. Dependency Risk: You Don't Control Your Distribution

The Problem: If you rely 100% on OTAs for bookings, you're at the mercy of their policies, algorithm changes, and commission increases.

Real Risks:

• OTA changes its ranking algorithm → your visibility drops overnight

• Platform increases commission rates → your profits shrink

• Technical issues or suspension → your bookings stop immediately

• OTA prioritizes bigger hotels in search results → you lose bookings

True Story: Many hotels saw bookings drop during COVID when OTAs changed policies and reduced marketing spend. Hotels with strong direct booking channels survived better.

Solution: Build a balanced distribution strategy:

• 40–50% bookings from OTAs (for reach)

• 30–40% direct bookings (through your website)

• 10–20% from walk-ins, repeat guests, corporate deals

Smart Strategy: Balance OTAs with Direct Bookings

The best approach isn't to avoid OTAs—it's to use them strategically while building your own direct booking channels.

Here's How:

Use OTAs for:

✅ Getting initial visibility and reviews

✅ Reaching travelers you can't reach alone

✅ Filling gaps during low-occupancy periods

✅ Testing new markets and audience segments

Invest in Direct Bookings for:

✅ Building guest relationships and loyalty

✅ Keeping 100% of your revenue (no commission)

✅ Controlling your brand and pricing

✅ Creating a sustainable long-term business

Pro Tip: Many successful hotels use OTAs to acquire new guests, then convert them into repeat direct bookers through excellent service and follow-up.