The Hidden Cost of Relying on OTAs: More Than Just Commissions

Introduction

Online Travel Agencies (OTAs) offer hotels wide exposure; however, hidden costs can threaten profitability in the long run. While most hotels complain about high commission rates, they often overlook deeper impacts such as data loss, restricted price control, and weakened digital independence.

In this article, we explain how reliance on OTAs can harm hotels not only financially but also strategically, and we offer solutions.

1. Commissions Quietly Erode Your Profit

Problem: "Commissions of 15–25% eat into margins."

OTAs take a significant portion of hotel revenue with commissions averaging 15–25% per booking. As commission rates rise, profitability drops even if occupancy increases.

Symptoms/Examples:

• Bookings increase, but net revenue does not
• Guests prefer OTA bookings over your own website

Solution:

Switching to a direct booking model eliminates commission costs and increases your hotel's gross profit.

Convertels increases direct bookings through conversion-focused web design and ad management, reducing commission pressure.

2. Customer Data Isn't Yours

Problem: "You received the booking, but the guest belongs to the OTA."

Bookings through OTAs leave the guest data in the OTA's system. Critical data like email addresses, behavior history, and purchasing tendencies are not shared with you.

Symptoms/Examples:

• You can't remarket to OTA guests
• Difficult to implement loyalty programs

Solution:

By setting up your own CRM, every booking becomes valuable customer data; you can manage remarketing, loyalty, and campaign processes under your control.

Convertels CRM integration turns every customer interaction into data, creating a valuable resource for future bookings.

3. You Lose Pricing Power

Problem: "You don't set the price; the OTA does."

OTA algorithms often pit hotels against each other. Your visibility on the platform is frequently dependent on lowering prices, which erodes control over your pricing strategy in the long term.

Symptoms/Examples:

• Forced to offer discounts under "lowest price guarantee" rules
• OTAs sell rooms cheaper than your own website

Solution:

Drive traffic to your own site with attractive offers through your advertising campaigns, retaining pricing control.

Convertels highlights your hotel competitively and profitably with Google Hotel Ads and Google Search campaigns.

4. Brand Recognition Takes a Back Seat

Problem: "Guests remember the platform, not you."

Guests booking via OTAs often remember the platform (e.g., Booking.com) rather than your hotel. This makes building loyalty more difficult.

Symptoms/Examples:

• Repeat bookings still come through OTAs
• Low brand searches and limited direct website traffic

Solution:

Brand awareness campaigns, social media ads, and email marketing ensure guests remember you and reduce repeat OTA bookings.

Convertels increases brand recognition with Meta ads and email marketing, helping you build a loyal guest portfolio.

5. Long-Term Dependence: Strategic Risk

Problem: "Today it's the commission; tomorrow it's a loss of control."

High OTA dependence leaves you vulnerable to future algorithm changes, commission increases, and ranking manipulations. Digital independence is a matter of security.

Symptoms/Examples:

• Ranking drops after OTA algorithm changes
• Payment/commission terms changed without notice

Solution:

By establishing your own advertising, booking, and CRM ecosystem, you gain full control. Reducing external dependency is critical for your hotel's long-term sustainability.

Convertels integrates all systems to gradually build your hotel's digital independence.

Conclusion: Don't Let Today's Commission Become Tomorrow's Loss of Control

While OTAs may seem attractive initially, they pose long-term risks in terms of profitability, data, and brand control. A direct booking-focused model provides both financial and strategic advantages.

Meet Convertels. Increase your direct bookings with a customized digital strategy and grow without losing valuable data.

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