As hoteliers step into budgeting season, the focus is on preparing for another year of evolving guest expectations, rising distribution costs, and tighter margins.
NB: This is an article from Userguest, one of our Expert Partners
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For 2026, successful budgeting won’t just be about cost control – it will be about investing in the right mix of channels, tools, and strategies that maximise profitability.
One thing is clear: reliance on OTAs continues to grow, but so does the cost. Commissions eat into margins, and hoteliers who don’t prioritise their direct booking strategy risk losing ground. That’s why this year’s budgeting exercise should put direct bookings front and centre.
Here’s your cheat sheet for creating a smart 2026 budget that sets you up for long-term growth.
1. Revenue Forecasting: Build Realistic Scenarios for 2026
Start with a clear picture of your expected revenue streams. Build three scenarios – conservative, moderate, and aggressive – so you can stay agile in response to changing demand.
- Base assumptions on actual occupancy and ADR trends from 2025.
- Factor in seasonal changes, group demand, and events in your market.
- Account for inflation and potential increases in OTA commission rates.
By working with flexible scenarios, you can make better-informed spending decisions and avoid surprises.
2. Channel Mix & Distribution Costs: Reduce OTA Dependence
One of the most overlooked areas in budgeting is the real cost of distribution. OTAs deliver visibility but at a price – often 15–25% in commission.
- Calculate your current OTA vs. direct booking split.
- Quantify what you’re paying in commissions and compare it to the cost of winning a direct booking.
- Set a target to grow your direct booking share in 2026.
Budgeting with distribution costs in mind will help you see where reallocating spend could save thousands in commission.
3. Direct Booking Investments: Secure Your Margins
Direct bookings aren’t free – but they’re far cheaper than OTA commissions when you use the right tools. For 2026, allocate budget for solutions that make your direct channel more competitive.
This includes:
- Personalisation tools that adapt offers to guest behaviour.
- Upselling and cross-selling features that lift revenue per booking.
- Automated engagement campaigns to convert more website visitors into paying guests.
