How to reduce OTA commission with more direct bookings

Online travel agencies (OTAs) such as MakeMyTrip, Goibibo, Booking.com and Agoda bring guests that a small hotel could never reach alone. They charge for it: a commission on each booking, set in your contract. The goal is not to leave the OTAs. It is to stop paying commission on guests who would happily book you directly.

This guide sets out a plan in the order most hotels can do it. It does not quote industry averages; your own numbers are the ones that matter, and the first step shows how to find them.

Disclosure: Keyvasa makes hotel software, including a booking engine. The steps below work with any system.

1. Know what each channel really earns you

Before changing anything, work out for last month, for each channel (each OTA, your website, walk in, phone, travel agents, corporate):

• room nights sold and room revenue;
• commission or fees paid;
• net revenue, which is room revenue minus commission and fees;
• net average rate, which is net revenue divided by room nights.

As an illustration only: if an OTA sold 100 room nights at ₹3,000 and your contract commission is 18%, you paid ₹54,000 and your net average rate on that channel was ₹2,460. Put the real figures from your contracts and invoices in this table, and you will see exactly what a booking moved from that OTA to your website is worth.

2. Make booking on your own website easy

A guest who finds you on an OTA often searches your hotel's name before booking. If your website has no way to book, or the booking page is slow, confusing or does not work on a phone, they go back to the OTA.

• Put a Book now button on every page, with the dates and rooms on the first screen.
• Show the total price, including GST, before the guest types their details.
• Take UPI as well as cards.
• Send the confirmation at once on email and WhatsApp.
• Test it yourself on a cheap phone on mobile data.

3. Get your direct rate onto Google for free

Google shows hotel prices in Search and Maps. Its free booking links let your own website appear next to the OTAs, and Google says hotel partners pay no fee for them and that its commercial relationships do not affect their ranking (Google Hotel Center Help). You can join through your Google Business Profile, or through a booking engine or channel manager that is a Google connectivity partner (Google for Developers). The booking page you give Google must be your own website, not an OTA or a social media page (Google Hotel Center Help).

Google ranks free booking links using signals that include price accuracy and the landing page experience, so keep your rates up to date and your booking page fast.

4. Read your OTA contracts before you price

Many hotels worry that offering anything better on their own website breaks an OTA contract. Read your current agreements for any rate parity or room availability clause, and take advice if they are unclear.

The legal background has moved. In October 2022 the Competition Commission of India fined MakeMyTrip and Goibibo ₹223.48 crore and directed them to change their agreements with hotels to remove price and room availability parity obligations with respect to other OTAs, among other directions (CCI press release). That order was about parity between OTAs, so check what your own contracts say about your website before you change your public rates.

5. Give direct guests a reason that is not only price

You can make booking direct better without undercutting your public rate:

• breakfast, an early check in or a late checkout included;
• a choice of room, or an upgrade when available;
• a more flexible cancellation policy;
• a welcome drink or a local tip sheet;
• a rate for returning guests, sent privately on WhatsApp or email.

State the benefit clearly on your website, next to the price.

6. Turn every OTA guest into a future direct guest

The guest who books through an OTA this time can book direct next time. At checkout, ask whether they would like offers for their next stay, and record their answer. Under the Digital Personal Data Protection Act, 2023, marketing messages should go only to guests who agreed to receive them, so keep a record of consent and an easy way to stop.

Then follow up with something useful, not spam: a festival offer, a returning guest rate or the dates of a local event.

7. Answer the phone and WhatsApp like a booking channel

Many Indian guests call or message the hotel before booking. Treat these as your highest value channel:

• answer quickly, ideally within minutes, during the hours guests ask;
• quote the total price, including GST;
• send a payment link straight away, so the booking is confirmed on the call;
• keep a short script so every staff member gives the same answer.

8. Build relationships that do not pay OTA commission

Local companies, wedding planners, event organisers and travel agents can bring steady business on negotiated rates. Even a few corporate accounts that book midweek can fill rooms that would otherwise go to OTAs at a discount.

9. Check the numbers every month

Repeat the table from step 1 each month. Watch three things: the share of room nights booked direct, total commission paid, and your net average rate across all channels. If direct share rises while net rate holds, the plan is working.

Sources

• Google Hotel Center Help, "About hotel free booking links": support.google.com
• Google Hotel Center Help, rates and availability using Google Business Profile, booking page URL rules: support.google.com
• Google for Developers, find a connectivity partner: developers.google.com
• Competition Commission of India, press release 51/2022 to 2023, 19 October 2022: cci.gov.in