For small and medium-sized hotels, online travel agencies (OTAs) tend to be both blessing and curse. On the positive side, they provide visibility, bookings, and access that no amount of traditional marketing can replicate. On the negative side, they siphon off substantial portions of revenue, restrict relationships with guests, and gradually reduce independent hotels to mere interchangeable entries in an algorithm-driven marketplace.
With time, what started out as a collaboration increasingly comes to resemble dependence. And for most hotel owners, particularly in the SME segment, it's becoming apparent: something has to give.
The Double-Edged Sword of OTAs
There is no denying that OTAs have revolutionized the hospitality sector. Booking.com, MakeMyTrip, Agoda, and Expedia provide international exposure with little effort. A hotel can go live, receive bookings in a matter of days, and show up in search results along with large brands.
This is a dream come true for small hotels that do not have large marketing budgets. But the fine print has another story to tell.
Commissions between 15% and 30% eat sharply into profit margins—ouch when the hotel is already working with shoestring budgets. Hotels lose management over how to speak with a guest pre-book, how to upsell, and how to manage that guest after stay. The guest data that's collected remains in the OTA's control. And, often, the guest hardly remembers the hotel's name—she remembers booking from the site.
This failure to recall brand and build relationship is a long-term danger to any hotel looking to expand in a sustainable way.
The True Impact on SME Hotels
For smaller and medium-sized hotels, OTA reliance generates a series of issues that extend beyond mere high commissions. It starts to mold the entire business model in ways that are perhaps not healthy.
Prices are frequently cut to undercut larger hotels. Special experiences become lost in the filters and reviews. Direct site traffic declines. Loyalty becomes more difficult to establish. And worse—hotels end up creating their guest experience and policies based on what is effective for OTAs, not what resonates with their vision.
The outcome? A business that's reactive, reliant, and in a perpetual game of catch-up.
Can Hotels Survive Without OTAs
In today's digital-first world, OTAs will probably always be a part of the distribution mix—but balance is the thing. It's not to eliminate OTAs entirely. It's to prevent them from being the sole or predominant source of bookings.
Because the reality is, every OTA reservation is a lost opportunity for a direct one. And direct bookings translate into more favorable margins, more control, and more relationships.
Strategies to Reduce OTA Dependency
The shift away from OTA over-reliance isn't sudden cuts—it's building alternative, sustainable channels. It begins with attitude, but it matures with the appropriate tools and frequency.
Begin by investing in your own booking engine. A robust, mobile-optimized website with a rapid and user-friendly booking process can start converting interest into direct revenue instantly. Add it to clear calls to action, compelling images, transparent policies, and live availability.
Second, establish a solid Google Business listing. Most travelers book hotels straight after viewing them on OTAs. An optimally optimized Google listing with up-to-date photos, positive reviews, and direct contact details assists you in securing those bookings.
Develop compelling deals that are exclusive to your site—early check-in, complimentary breakfast, loyalty points, or value-added packages. Not cheaper than OTAs, but superior to OTAs.
And most importantly, begin developing your brand. Social media isn’t just for picture-perfect posts—it’s a space to tell your brand’s story. Use email to reconnect with previous visitors. Get feedback, engage carefully, and develop a devoted community.
Years down the road, your hotel is no longer just a listing—it's a destination in its own right.
OTAs as a Channel, Not a Crutch
When utilized strategically, OTAs can continue to be a solid component of your distribution mix—particularly for new hotels or during off-seasons. But the mentality needs to change from dependence to diversification.
Use OTAs as gateways, not destinations. When a guest reserves via an OTA, that's your initial touch. Then, how you greet them, interact with them, and welcome them back—that's your brand moment.
A robust CRM system, considered communication, and superb service can convert OTA visitors into direct lifetime customers.
The Big Question
With visibility at everyone's fingertips but loyalty an anomaly, hotel proprietors have to wonder:
Are we creating a brand that is remembered by guests—or just appearing on another's platform hoping to get selected?
Because in the end, it's not about disconnecting from OTAs—it's about generating enough value that you don't need to.
And when you do that, you're not operating a hotel—you're establishing a business that owns its future.