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How OTA costs affect a hospitality property's margin

How to read commissions, acquisition costs and margin correctly without relying on generic percentages that may not match your own contracts.

Start from your actual payouts

Commercial terms vary by platform, country, programme, promotion and contract. The right starting point is your property's actual payout data, not a generic percentage found online.

Calculate the cost per booking

For each reservation compare the amount paid by the guest, your net payout, promotions funded by the property, payment costs and any other fees. The difference shows the effective acquisition cost.

Compare with direct booking fairly

Direct bookings also have costs: website, payment processing, marketing, support and technology. The useful comparison is between the real costs of both channels, not between an 'expensive OTA' and a 'free website'.

Include customer value over time

An owned channel may create additional value by making repeat bookings, direct contact and brand recognition easier. That value should be measured over time.

Use scenarios, not guarantees

A useful calculator lets you change assumptions with your own data. It should not promise guaranteed savings, but help you understand what level of direct bookings could justify the investment.

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