Why are so many hotels against OTA's and their commission?

It continues to surprise me how many people in our industry are fiercely opposed to the commission paid to Online Travel Agencies (OTA's). So often, this frustration overlooks a simple reality: many hotels would struggle to survive without them.

Let’s start with the headline figure everyone focuses on. Is paying 15–18% commission on a booking really such an outrageous cost?

Putting OTA Commission Into Perspective:

When you compare OTA costs to other distribution channels, the argument quickly loses its weight. Take consortia programs and traditional travel agents, for example. While their commission typically sits around 10–15%, that’s rarely where the costs end. Hotels are also expected to offer:

• Hotel credits

• Free breakfast

• Complimentary upgrades

• Added amenities

• Participation in sales trips (often overseas)

When you total these expenses and compare them to a straightforward OTA commission, you’ll often find that OTA's are actually the more cost-effective option.

A common counterargument is that travel agents and consortia deliver a “certain type of guest” that hotels prefer. I disagree. With the right OTA strategy—carefully selected promotions, and thoughtful rate positioning—you can absolutely attract the same high-value guests. This isn’t theory - I have the data and results to back it up.

What About Direct Bookings?

The same logic applies when we talk about direct bookings, particularly for new hotels starting out. The investment required to compete with OTA's in digital marketing and online advertising can be astronomical. In many cases, it far exceeds the cost of OTA commission—often before a single booking is secured.

More established hotels usually grow their direct booking share through repeat guests, exceptional service, brand presence and word of mouth. Even then, sustained growth still requires a dedicated digital marketing budget to support visibility and conversion.

OTA's Are Not the Enemy:

Don’t get me wrong—now more than ever, hotels need to rely on multiple market segments and distribution channels to generate revenue. A healthy mix is essential.

However, blaming OTAs for high commission costs—especially when they consistently rank among a hotel’s top two or three revenue producers—feels misguided and, frankly, a little petty. Achieving the same volume and reach through other channels almost always involves significant costs, often far greater than those associated with OTAs.

Instead of fighting them, hotels should focus on using OTA's strategically—leveraging their reach, controlling costs, and maximizing overall profitability. When viewed objectively, OTAs are not the problem - they are one of the most powerful tools hotels have at their disposal.