In this digital-first travel environment, no other players have expanded as fast—or as aggressively—as Online Travel Agencies (OTAs). OTAs control the booking process, show up first in every search, and have become a default option for travelers across the globe.
But here's the real truth: OTAs have created their billion-dollar fortunes by taking a seat between hotels and their guests, extracting large commissions and holding sway over visibility, guest information, and the booking process. For hotels, particularly independent and small-to-mid-size hotels, this equation has produced both opportunity and dependence—one that is worthy of closer examination.
The Business of Being the Middleman
OTAs don't own a room, run a resort, or pour guests a bowl of cereal. And yet they always take 15% to 30% of each booking made on their sites. How?
They are presented as discovery engines—collecting inventory, making it easy to compare, and providing consumers with the convenience of fast booking. That convenience is funded somehow, and that cost is transferred to the hotels.
For most properties, this commission model devours profits outright, leaving razor-thin margins. And the irony? Hotels do all the work—while OTAs get a cut for the connection.
Guest Data? Not Yours Anymore
One of the most underappreciated effects of OTA dominance is the loss of guest ownership. When a guest books on an OTA, their data—name, email, preferences, even feedback—often remains with the platform, not the hotel.
That means the hotel cannot:
- Nurture the guest post-stay
- Offer loyalty benefits directly
- Upsell or cross-sell future stays
- Build meaningful relationships
The guest might remember the OTA’s logo or app, but often forget the name of the hotel they stayed in. This creates a long-term branding problem for hotels, where repeat bookings return to the OTA—not to the hotel itself.
Visibility Is Bought, Not Earned
One of the main reasons why OTAs dominate to such an extent is control of visibility. Within search results, map listings, and travel platforms, OTAs usually rank top—the reason is not necessarily better value, but they spend enormous amounts of money on digital advertising and SEO.
Hotels, however, usually have a hard time ranking—even when travelers are looking for them by name. This creates effectively a pay-to-play situation, where hotels either play or remain invisible.
This disparity further entrenches OTA dominance, since more bookings go through them, boosting their income—and marketing influence.
The Loyalty Loop That Doesn't Include You
OTAs reward their guests: reward points, cashback, exclusive discounts, app-only offers, and so on. The programs are engineered not to favor the hotel—but to have the guest remain loyal to the platform.
That is, a guest who loves their stay at your property might still return to the OTA for their next stay, not to you. You're becoming part of a transaction, not a relationship.
Without a strong direct booking strategy, hotels are in danger of becoming interchangeable commodities on a long list—priced and reviewed.
Hotels Shoulder the Risk. OTAs Enjoy the Reward.
When cancellations surge, when guests act irrationally, or when expectations are misaligned—it's the hotel that bears the brunt. The OTA merely facilitates the transaction, frequently hiding behind automated policies and templated messaging.
In the meantime, hotels have to take the hit—financial and reputational. The hotel has the operational responsibility, but the revenue control tends to be with the OTA.
What Can Hotels Do?
The objective is not to eschew OTAs completely. They offer visibility, particularly for new or less-known properties. But hotels need to transition from dependence to digital independence.
That means:
- Investing in a robust website with direct booking ability
- Developing loyalty programs that reward guests directly
- Ownership and care of guest relationships with CRM
- Utilizing channels like Google Business Profile for discovery
- Marketing through channels like email, social, and influencers to establish a brand—not sell a room
The trick is to make OTAs part of your approach—not all of it.
The Big Question
With OTAs getting larger by slicing a pie out of every stay, the question for hoteliers is this:
Are we creating a brand—or simply filling rooms via someone else's business model?
Because while OTAs give us reach, only your brand can generate recall. And when you begin to own your guest relationships, you don't just save commissions—you create long-term value.