Online travel agents are a necessary part of a hotel’s distribution mix. But when too much of the business runs through them, the commission bill becomes a structural drain on margin. Every direct booking saved is a commission you keep.
The challenge
A regional hotel with more than 50 rooms and a restaurant was running more business through online travel agents than the benchmarks supported for a property of its type and size. The hotel operated at medium occupancy with a reasonable weekday-to-weekend spread. OTA commission expense was consistently above where it should be, and there was no active strategy to shift bookings to direct channels.
What we did
We ran a Profit Boost Review. The financials for the last two years were tested against hotel-specific benchmarks. The OTA commission line was a clear opportunity. We ran a discovery process with the client and the front office team to understand what was driving the booking mix and what the team thought could shift it.
The recommendations focused on targeted changes to drive more direct bookings. A clear target for the direct booking share was set and tracked through the review cycle.
The result
- Online travel agent commission expense: $11,500 saving per year, 13% more efficient
Achieved within 12 months. The revenue did not drop. The commission bill did. That is what moving the booking mix achieves: review it, quantify it, report it – business then implement it.
