OTAs have long been a cornerstone of hotel distribution. Their appeal is obvious as they deliver volume, visibility and access to global demand that would be difficult for many hotels to generate on their own.
NB: This is an article from Lighthouse
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A listing on Booking.com or Expedia places your property in front of millions of travelers, often long before they would ever land on your own hotel website. For smaller hotels with limited marketing budgets, OTAs can act as an equalizer, ensuring you compete alongside larger, better-known brands.
But while OTAs excel at filling rooms, they are not designed for brand-building or loyalty cultivation. When guests book through an OTA, they tend to see the OTA’s brand, not the hotel’s. That means little opportunity to nurture repeat stays, drive direct engagement or capture valuable guest preferences.
There are also risks to leaning too heavily on OTA bookings.
High commission fees can steadily eat into profit margins. Reliance on OTA-controlled pricing models can reduce flexibility. And because OTAs often restrict access to detailed guest data, you miss out on the insights needed to personalize service or build long-term relationships.
That’s why OTAs should be treated as a performance channel, useful and necessary, but one that must be managed carefully.
Just as you monitor ROI from paid advertising, metasearch or social media, OTA performance should be evaluated in terms of cost, profitability and incremental demand.
By reframing OTAs this way, you can make them work for your business, rather than letting them quietly dictate the booking mix.
How to diagnose your booking mix
Many hotels don’t have a full picture of how each distribution channel contributes to their business. OTAs may drive strong volume, but at what cost?
Direct bookings might look healthier on the surface but are they optimized for profitability? Without clear visibility into channel contribution, costs and guest quality, it’s easy to make assumptions rather than decisions grounded in data.
To truly understand your booking strategy and mix, it’s essential to measure performance across multiple dimensions. Key metrics include average daily rate (ADR) by channel, average length of stay (ALOS), cancellation rates and net revenue after commissions and fees. These figures show not just how much revenue a channel generates but also how profitable and predictable it is.
