What is the difference between OTA bookings and direct bookings?

OTA bookings come via online travel agencies like MakeMyTrip, Goibibo, Booking.com, or Agoda and usually involve a commission per reservation. Direct bookings are made on the hotel’s own channels (website, phone, WhatsApp, walk-in) with no OTA commission and full control over guest data.

Are OTAs or direct bookings more profitable for hotels?

Direct bookings are typically more profitable because there is no third-party commission. However, OTAs provide powerful visibility and demand generation, especially for new or independent hotels. The best approach is a balanced mix that grows direct share over time.

What commission do OTAs charge hotels?

Commission rates vary by platform, property type, and terms, but many hotels see an effective range around 15%–25% per confirmed reservation. Negotiated programs and promotional placements can change the effective rate.

Do OTA bookings have higher cancellation rates than direct?

Hotels often report higher cancellation rates on OTA channels versus direct. Clear policies, prepaid or partial-prepay plans, and inventory controls can help reduce last-minute cancellations on any channel.

What is a healthy split between OTA and direct bookings?

There is no one-size-fits-all. Many independent hotels aim for a balanced mix and progressively increase direct share as their brand, website, and remarketing improve. Track your ratio monthly and set targets by season.

How can hotels increase direct bookings without losing OTA visibility?

Maintain OTA visibility for discovery, but optimize your website for speed, mobile UX, SEO, and conversion. Use clear direct-only value (e.g., flexible check-in, breakfast, upgrades), email/WhatsApp remarketing, and retargeting ads to convert repeat stays directly.

What is rate parity and how does it affect OTA vs direct strategy?

Rate parity is the practice of keeping similar public rates across channels. Many hotels keep public parity while offering value-adds on direct (extras or packages) and using closed-user group or coupon pricing strategically.

Does Pay@Hotel on OTAs count as an OTA booking?

Yes. Even if the guest pays at the property, the reservation originated on the OTA and is typically commissionable under the OTA’s terms.

How do channel managers help balance OTA and direct sales?

A channel manager syncs rates, inventory, and restrictions across OTAs and your booking engine in real time. This prevents overbooking, reduces manual errors, enables dynamic pricing by channel, and supports a coherent distribution strategy.

What is the billboard effect and why does it matter?

The billboard effect describes when guests discover a hotel on OTAs and later book directly on the hotel website. Strong branding, a user-friendly site, and value-rich direct offers help capture these guests the next time.

What tactics reduce OTA dependence without hurting occupancy?

Improve organic search and local SEO (Google Business Profile), run remarketing to past OTA guests, build email/WhatsApp lists, use packages and add-ons for direct, and deploy dynamic pricing to keep occupancy while protecting margins.

Can hotels list on multiple OTAs without creating conflicts?

Yes. Many hotels list on several OTAs to broaden reach. Use a channel manager for real-time availability, maintain consistent content and policies, and set thoughtful restrictions and promotions by channel to avoid conflicts.

OTA vs Direct Booking: Finding the Right Balance for Your Hotel

OnlineHotelier
Aug 14, 2024
2 min read

Updated: Sep 12

When it comes to hotel distribution, one of the most common questions hoteliers ask is:

“Should I focus more on OTAs or on direct bookings?”

Both have clear advantages and disadvantages. Let’s break it down step by step.

1. What Are OTAs in Hotels?

An OTA (Online Travel Agency) is a digital platform like MakeMyTrip, Goibibo, Booking.com, Agoda, or Expedia where travelers can search, compare, and book hotels online.

For hotels, OTAs act like visibility engines—putting your property in front of millions of travelers who may have never discovered you otherwise.

But with visibility comes a cost: commissions usually between 15%–25% per booking.

2. What Are Direct Bookings?

Direct bookings are reservations made through your hotel’s own channels:

Hotel website
Social media links
Walk-ins & phone calls
Email or WhatsApp campaigns

Direct bookings cut out the middleman, giving you more control, better margins, and stronger guest relationships.

3. OTA vs Direct Booking: Side-by-Side Comparison

Factor	OTA Bookings	Direct Bookings
Visibility	Massive global reach via OTA marketing budgets	Dependent on your own website & SEO
Commission	15%–25% per booking	Zero commission
Guest Data	OTA owns guest details, limited personalization	You own data for remarketing & loyalty
Trust Factor	Guests trust OTAs for reviews & refund policies	Guests trust your brand once convinced
Cancellations	Higher (sometimes 40%)	Lower (17%–20% on average)
Loyalty Building	Weak, OTA brand is remembered	Strong, direct relationship with guests

4. Why Hotels Need OTAs

Global Exposure – Appear where travelers are already searching.
Credibility Boost – Verified reviews and secure payment gateways.
Fill Gaps – OTAs help during low season and last-minute demand.
Marketing Support – Benefit from OTA ad spend without paying upfront.

5. Why Hotels Need Direct Bookings

Higher Profitability – No commissions.
Data Ownership – Build guest database for repeat sales.
Stronger Branding – Guests remember your hotel, not the OTA.
Upsell Opportunities – Offer add-ons like meals, spa, or upgrades.
Loyalty Programs – Convert one-time guests into repeat customers.

6. The Real Catch: Dependence on One Side

Relying only on OTAs means:

Shrinking profit margins
Higher cancellation risks
Weak control over guest data

Relying only on direct bookings means:

Limited reach
Higher marketing costs
Slower visibility growth

7. Best of Both Worlds: A Balanced Strategy

The smartest hotels in India use both OTAs and direct bookings strategically:

Use OTAs for exposure & demand generation.
Build your own website with SEO & Google Business Profile.
Run social media ads to retarget OTA guests for future direct stays.
Offer exclusive perks (late check-out, free breakfast) on direct bookings.
Use a Channel Manager to keep rates, inventory, and availability in sync.
Use a Booking Engine to smoothen the flow of booking for a Guest

Final Thoughts

In the OTA vs Direct Booking debate, there’s no single winner. OTAs give you reach, Direct bookings give you profitability.

For Indian hotels, the real success lies in striking the right balance—using OTAs as a launchpad while continuously building strong direct booking channels to secure long-term growth.

Pro Tip: Track your OTA vs Direct ratio monthly. A healthy balance is 60% OTA : 40% Direct for most independent hotels in India. Over time, aim to grow your direct share without losing the visibility OTAs provide.