The hidden costs every accommodation provider must understand
Direct bookings aren’t free. Uncover the hidden costs, proven strategies and data-driven steps hoteliers need to grow direct reservations effectively.
In the hospitality industry, we often hear the mantra: “Direct bookings are free.'“ It’s a compelling idea. Why pay commission to online travel agents (OTAs) when you can convert guests directly on your own website booking engine? Industry voices urge owners and investors to prioritise direct bookings, to fight back against the marketing dominance of OTAs and to view any booking through a third-party channel as a failure.
But here’s the truth: direct bookings are not free. They require significant investment, ongoing effort and a strategic approach. Before you embark on this journey, you need to understand what is involved and how to measure success.
The Reality Behind OTA Dominance
Consider this: in 2024, the big four OTAs (Airbnb, Booking Holdings, Expedia Group and Trip.com) spent a staggering US$17.8 billion on marketing. Booking Holdings alone increased its marketing spend by US$1.8 billion in the first quarter of 2025, while Expedia boosted its investment by 6% to US$1.76 billion*.
* Source: PhocusWire
These companies are digital marketing powerhouses. They employ teams of specialists dedicated to analysing data, tracking consumer behaviour and innovating ways to attract bookings. They test relentlessly, adapt quickly and leverage cutting-edge technology to stay ahead.
Contrast that with the reality for most accommodation providers who wear multiple hats: housekeeping, maintenance, reception, bookkeeping – often with limited, or no marketing budgets. Competing with OTAs isn’t just about willpower; it’s about strategy and resources.
What It Takes to Grow Direct Bookings
Building a successful direct booking channel means creating a sales funnel that attracts, engages and converts guests. This is not a one-time task; it’s an ongoing process that demands time, money and expertise. The key components include:
Website Excellence
A visually appealing, mobile-friendly and easy to navigate website that ranks well on Google.
A user-friendly booking engine that simplifies the reservation process.
Regular updates to keep your website content fresh and relevant.
Strategic use of keywords to boost organic visibility across AI platforms and traditional search engines.
To read more on AI content creation for boutique operators, click here
Digital Presence
Consistent, proactive engagement with your Google Business Profile.
Invest in paid digital marketing to secure page one visibility in search results.
Refresh photography and video assets to align with current marketing platforms and highlight the property’s unique look and feel, meeting guests’ expectations.
Technical SEO updates including GEO targeting and Schema markup to optimise AI-driven search tools.
Customer Engagement
Send newsletters to past guests with compelling reasons to return and exclusive offers encouraging them to book directly.
Be consistent on social media, highlighting your property’s unique appeal.
And once you’ve done all this, you need to analyse the results. That means mastering tools like Google Analytics 4, META Business Suite Insights and newsletter metrics to track website traffic, conversion rates, audience engagement and campaign performance. Without data, you are flying blind, strategy becomes guesswork and you may be missing opportunities.
The Cost of Direct Bookings
There is no universal formula for calculating the cost of a direct booking, but industry consensus suggests it starts at 6% and grows depending on digital marketing spend.
To read more on low cost incentives for increasing direct bookings, click here
This excludes direct booking incentives like discounts and value adds such as complimentary upgrades or free amenities, all of which add to your acquisition cost.
So, while direct bookings will reduce your OTA commissions, they are far from free. They require investment in technology, marketing and expertise.
How to Start: Practical Steps
At RevenYou, we recommend starting with a clear plan:
Know Your Baseline
How many visitors does your website attract?
Which pages do they engage with?
What percentage converts into bookings?
Set an Investment
What budget are you prepared to allocate for growing direct bookings?
To learn more about budgeting, click here
Decide What to Outsource
Be honest about your skills, time and resources.
For more on outsourcing, click here
Understand Your Audience
Where do they spend time online?
Which platforms matter most?
What, or who, influences their decision making?
Dream Big, Plan Smart
Define your five-year vision and build a roadmap to get there.
Document your plan, prioritise tasks logically and be realistic about what your property can achieve. Monitor your spend, compare it to OTA commissions and review results regularly. Most importantly, stay adaptable: what worked yesterday may not work tomorrow.
To read more about the evolving traveller, click here
Conclusion
Direct bookings are a worthy goal, but they are not free. They demand strategic investment, consistent effort and a commitment to data-driven decision-making. If you’re ready to take control of your distribution strategy, start with a plan, track your progress and be prepared to embrace change.
At RevenYou, we help properties navigate this journey with practical, tailored strategies. Because in today’s competitive landscape, success isn’t about avoiding OTAs, it’s about building a balanced, profitable mix.
To read more on ensuring your website content is AI friendly, click here
To read more on low cost marketing activities any accommodation provider can implement in 2026, click here
Published: November 2025
