OTAs: The Marmite Effect and What Changed That Most Hotels Have Not Caught Up With.
OTAs provoke the same reaction in almost every hotel owner conversation I have. A slight wince, a sigh, sometimes a genuinely heated few minutes about commission rates. Like Marmite, they split opinion sharply, and like Marmite, they are not going anywhere. The more useful question for an independent hotel is not whether to use OTAs, but how to use them without quietly losing control of the brand, the margin and the guest relationship in the process. And the rules of that relationship have shifted more than most hotels realise.
Why OTAs earned their place in the first place.
It is worth being honest about why OTAs became as dominant as they are, because the reasons are real and the value they provide is genuine, even for hotels that resent paying for it. They invest enormous sums in SEO, paid search and metasearch, putting an independent hotel in front of audiences it would have no realistic way of reaching alone. The four largest OTA groups spent close to eighteen billion dollars combined on sales and marketing in a recent year, much of it on the very Google ad inventory that independent hotels are competing for at a fraction of that budget. Guests trust the convenience: comparing options, reading reviews and booking in seconds on a platform they already know. And in shoulder or low season, OTA demand can keep occupancy moving when a hotel's own direct traffic is quieter than it would like.
Used deliberately, this is a legitimate part of a distribution strategy. The problem has never been that hotels use OTAs. It is when OTAs become the default rather than one tool among several, and a hotel stops actively managing the relationship.
The commission drain is real and it keeps adding up.
Commission rates typically run between 15 and up to 30% per booking and for many independent hotels that fee represents the difference between a healthy margin and a property that is technically full but barely profitable. For a boutique hotel filling a modest number of rooms at a typical rate, that commission can easily total hundreds of thousands of pounds a year flowing to a third party rather than the hotel's own bottom line. It is worth treating that figure as a real annual cost line, not an abstract percentage, because seeing it in absolute terms tends to focus attention on direct booking investment far more effectively than the percentage alone ever does.
There is a second, less visible cost beyond the commission itself: lost loyalty. A guest who books through an OTA often remembers the OTA, not the hotel, particularly on a first stay. That guest relationship, the email address, the preferences, the opportunity to build a direct connection, sits with the OTA unless the hotel actively works to capture it during the stay itself.
The legal picture around rate parity has genuinely changed and many hotels have not noticed.
This is the update most hotels have missed, and it changes a meaningful part of the OTA relationship. As of December 2024, Booking waived parity clauses across the EU and EEA under the Digital Markets Act, and the Court of Justice of the EU confirmed in September 2024 that both wide and narrow parity clauses are incompatible with EU competition law. In practice, this means hotels operating in Europe are now legally free to offer lower rates on their own direct channels than they show on Booking, something that was contractually prohibited for the better part of two decades.
This is a genuine strategic opening, but it comes with an important caveat that is easy to miss. Legal freedom and commercial reality are not the same thing. Booking's own ranking algorithm still tends to reward properties that maintain rate consistency across channels, and programmes like Genius continue to apply independent discounts that can undercut a hotel's displayed rate regardless of what the hotel itself has set. A hotel that aggressively undercuts its OTA rate without understanding how that affects its OTA visibility may find itself trading one problem for another. The sensible approach is testing a modest, deliberate rate advantage on direct channels, paired with genuinely exclusive perks, rather than assuming the legal change alone solves the parity problem.
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Reclaim the searches that should never have left in the first place.
OTAs routinely bid on a hotel's own brand name in Google and Bing Ads. If a hotel is not running its own branded paid search campaign, it is allowing exactly the guests who were already searching specifically for it, the easiest, most qualified traffic available, to be intercepted by a competitor paying to sit above the hotel's own organic listing. This is one of the clearest, lowest-cost wins available, since the cost per click on a hotel's own brand name is typically low and the conversion rate is high, given the guest already knows exactly who they are looking for. Every booking reclaimed this way saves the full commission that would otherwise have gone to the OTA. This connects directly to the wider paid and organic search strategy covered in how PPC and SEO work together to drive more hotel bookings: brand protection through paid search is one of the few campaigns that should run continuously, never paused, regardless of budget pressure elsewhere.
Watch for weekend undercutting, when revenue teams are least likely to notice.
A pattern worth actively monitoring is OTAs quietly discounting rates on metasearch late on a Friday or Saturday night, precisely when most hotel revenue teams are least active and least likely to catch it. This is rarely coincidence. Real-time rate shopping tools that flag undercuts as they happen, rather than relying on someone manually checking rates over a weekend, close this gap without requiring constant manual monitoring. Pairing this with direct-only perks that OTAs structurally cannot replicate, a genuine complimentary upgrade, early check-in, a welcome amenity, gives a guest a reason to book direct even on the rare occasion the price briefly matches.
Sometimes advertising on the OTA itself makes commercial sense.
This is the part that surprises hotels who have spent years resenting OTA commission: paying for prime placement within an OTA's own platform, through tools like sponsored listings or OTA-run advertising products, can occasionally produce a strong return precisely because it captures a guest already deep in the consideration and booking process on that platform. The economics need to be judged on their own merits rather than dismissed on principle, since a modest, well-targeted spend that produces a meaningfully larger return in attributed bookings is a different proposition entirely from accepting standard commission as a cost of doing business. The key discipline is treating this as a deliberate, measured tactic rather than an emotional decision either way.
Convert OTA guests into direct guests during the stay, not after they have already left.
The single highest-leverage moment to reduce OTA dependency long term is not before the booking, it is during the stay itself. A guest who arrives through an OTA and has a genuinely excellent experience is, at that moment, highly receptive to building a direct relationship with the hotel, provided that opportunity is actually created rather than left to chance. Capturing a guest's email address with proper consent during check-in or at another natural touchpoint, and then nurturing that relationship through a well-segmented newsletter programme, is how a one-off OTA booking becomes a direct booking on the guest's next visit. This is also where free Google booking links matter, since a returning guest searching the hotel's name on Google should see the direct rate displayed clearly alongside the OTA options, not be funnelled back toward the platform they used the first time purely because the direct channel was harder to find.
Treat each OTA as a performance channel, not a permanent fixture.
Not every OTA connection deserves to stay live indefinitely. The healthier mindset, and the one the most common hotel marketing mistakes article touches on more broadly, is reviewing each connected OTA periodically on its actual performance: booking volume, net revenue after commission, cancellation rate, and whether it is bringing genuinely new guests or simply cannibalising demand that would have booked direct anyway. Properties that are still losing bookings to OTAs despite active management often discover the leak is concentrated in a small number of channels or specific months, not spread evenly, which makes the fix far more targeted than a blanket "reduce OTA reliance" goal would suggest.
This review should happen on a fixed schedule rather than only when commission costs prompt a moment of frustration. A quarterly look at each OTA's contribution, set alongside the cost of maintaining that connection, including any optional visibility programmes a hotel has opted into, gives a far clearer picture than an annual gut feeling about whether OTAs are "getting worse." Some channels will consistently justify their place in the mix by reaching genuinely new markets a hotel could not access alone. Others quietly become a habit rather than a deliberate choice, continuing simply because nobody has stopped to ask whether they are still earning their commission.
So, friend or foe.
The honest answer remains both and that has not changed even as the legal and commercial details around it have moved. OTAs generate visibility, fill demand gaps and open markets an independent hotel could not reach alone. But the brand a guest remembers, the website they return to, and the margin that actually lands on the hotel's bottom line all need active protection, not passive hope. The end goal is a direct-first distribution strategy where OTAs complement rather than dominate, because the day an OTA effectively controls a hotel's booking volume is the day that hotel has lost meaningful control over its own brand and its own pricing.
If it is unclear where OTA dependency is actually concentrated for your property, or whether your branded search, rate parity position and free booking links are currently working as hard as they should, a Hotel Visibility Audit reviews exactly this across your distribution mix, with a clear, prioritised set of actions delivered within two to three weeks. For hotels that want this actively managed on an ongoing basis rather than assessed once, an Embedded Marketing Partner takes on branded search protection, rate monitoring and direct booking campaigns as a standing workstream.
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Frequently Asked Questions About The Role Of An OTA In A Hotel Distribution.
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In the EU and EEA, yes, in legal terms. Booking waived parity clauses across the EU and EEA in December 2024 following the Digital Markets Act, and the Court of Justice of the EU separately confirmed that wide and narrow parity clauses breach EU competition law. Hotels are legally free to undercut OTA rates on direct channels. The practical caveat is that Booking’s ranking algorithm still tends to reward rate consistency, and independent discount programmes like Genius can undercut a hotel's own displayed rate regardless of the legal position, so the commercial reality is more nuanced than the legal freedom alone suggests.
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Commission rates generally range from 15 to 30% per booking and effective rates can run higher once optional visibility boosts and promotional programmes are included. For many independent hotels, this represents a substantial portion of total marketing and distribution spend, which is why protecting and growing the direct channel has a direct, measurable impact on profitability rather than simply on booking volume.
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Generally not, since OTAs provide genuine reach and demand generation, particularly for new properties or in low season, that would be expensive and slow to replicate through direct channels alone. The more realistic and commercially sound goal is reducing over-reliance: using OTAs deliberately for what they do well, discovery and demand generation, while actively building the direct channel through branded search protection, a strong website, free booking links and a genuine post-stay relationship with guests.
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Running a continuous branded paid search campaign that protects searches for the hotel's own name is one of the lowest-cost, highest-return actions available, since OTAs routinely bid on hotel brand names and will capture that traffic by default if the hotel is not bidding on it. Beyond that, converting OTA-sourced guests into direct relationships during their actual stay, through consented data capture and a well-managed follow-up programme, has the largest compounding effect over time.