Distribution

What a channel actually costs you

5 February 20266 min read

Commission is the visible number. It is rarely the largest one.

Ask a hotelier what an OTA costs and you will be told a percentage. It is the wrong number, or at least a small part of the right one. Commission is simply the part that arrives on an invoice.

Add the payment fees. Add the cancellation behaviour — a channel whose guests cancel at twice your direct rate is quietly consuming inventory you could have sold. Add the length of stay, which is usually shorter. Add the on-property spend, which is usually lower. Then add the cost of a guest who came once, had a fine time, and will book through the same platform next year because they never learned your name.

Set that against acquisition cost on the direct side — the site, the engine, the paid search, the time — divided by the bookings it produced. Now the two numbers are comparable, and the conversation stops being ideological.

Sometimes the expensive channel wins. A property in a destination nobody searches for needs the reach, and buying it is a rational decision. What is not rational is never having done the arithmetic, and discovering the answer in the third year of a contract.

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