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How to reduce OTA commission fees

And increase your lodging establishment's profit margins.

OTA commission fees: Tips on how to reduce them - Smartpricing

OTA (Online Travel Agency) portals such as and Airbnb have grown increasingly relevant in the hospitality industry.

Industry players have realized that it is impossible to get rid of them, but in the meantime they are asking themselves:

Is it possible to limit the weight of OTAs on a hotel's revenue?

The answer is yes, it is possible to lower the impact of OTAs (and improve revenue) by reducing commissions.

Let’s see how.

What reducing OTA commissions means

Reducing commission fees does not mean decreasing the contracted percentage of bookings from portals.

Instead, it means reducing overall revenue from OTAs in favor of revenue from direct bookings.
In other words, disintermediate.

Exploiting the weaknesses of OTAs

The elements that make OTAs attractive to customers are mainly:

  • convenience and ease of use
  • affordability of prices
  • variety in choice of accommodations
  • security and guarantees

Now, how can a lodging establishment like yours (David) have a win over the giants of online room distribution (Goliath)?

By carefully choosing which OTAs' weaknesses to target and which features to use to your advantage.

Let's look at some examples.

  • The convenience and ease of use of OTAs is unparalleled for those who want to book quickly. Try to improve your direct booking process so that it is as quick and pleasant as possible.
  • Not all customer segments like to book quickly on OTAs. Make sure you offer them all the relevant information they are looking for.
  • Since rate parity is no longer a constraint, affordability has become a weapon at your disposal. Use this advantage wisely, without eroding your profit margins. Read our complete guide to revenue management to learn how.
  • The variety of choice available from OTAs will always be working against you. However, you can compensate by offering exclusive deals and benefits only to those who book directly from you.
  • It is difficult to offer the same guarantees and cancellation policies that OTAs can afford. However, you should strive to offer your customers the same or similar conditions, otherwise you will lose the battle early on.

Let's now look at what specific actions you can take.

Improve the direct booking process

Booking a room from you must always be easy, fast, safe and pleasant.

Your website must allow guests to book in just a few clicks (3 or 4), including from your cell phone.

Here are some tips to make your booking process more efficient.

  • The website should be structured to keep the booking steps as straightforward as possible.
  • The "book" button should be visible on every screen and lead straight to the booking engine.
  • The structure of the booking engine and the information it contains (images, writing, etc.) should be as relevant and essential as possible.
  • The booking engine must offer the ability to compare the price with that of other platforms (rate checker) and to save the quote to complete the purchase at a later time.
  • The booking engine must offer the ability to complete the purchase in a secure environment and with multiple alternative payment or guarantee methods (credit card, bank transfer, installment payment).
  • The phone booking process must be fast and efficient; staff should always have the same website or booking area of the booking engine at hand to quickly respond to a request for a quote over the phone.
  • Staff should follow a proven script aimed at maximizing phone reservations.

Your facility's official website, OTA profiles and theme sites, and social media profiles should be up-to-date and consistent to convey trust.

Do content marketing

Customers need varying amounts of time to choose where to book their stay.

Content marketing can help you provide them with abundant and detailed information during their customer journey.

Here are the main pieces of content you can produce.

  • On your website, post a series of insights (web pages or blog articles) for those who like to hear about the uniqueness and distinctiveness of the experience they are going to have.
  • On social media, alternate descriptions of your hotel and services with stories from those who work there and customer testimonials.
  • Create a newsletter to collect email addresses from your potential customers and share original content for those who already follow the establishment on other channels.
  • Optimize online content for search engines to gain extra visibility through Google.
  • Create and promote events, initiatives and contests to attract new potential customers.
  • Create and promote a series of offers reserved for newsletter contacts or those who follow you on other channels. Use all these tools to disintermediate by offering not only a lower price than OTAs, but more importantly a better service.
  • Activate a permanent Brand Protection campaign through Google Ads to ensure that your facility's site always ranks first in Google search results.
  • Create and keep an updated Google MyBusiness profile so you can link your booking engine.
  • Install Google GA4 or other analytics to track activity on your site and optimize content.
  • Based on your guests, consider buying advertising space in magazines (online and offline) and theme sites to promote your hotel.

Deliver a memorable guest experience

Customers who arrive via OTAs may return to you in the future.

Therefore, the best disintermediation tool is to offer them a great stay experience and convince them to book directly through you later.

Establish a relationship with your guests by anticipating and fulfilling their needs, and always remember to ask for feedback.

Also create exclusive offers tailored to their needs to prompt them to return to you as direct customers.

In order to succeed in reducing the impact of OTAs on your revenue, knowing how to set your room rates is critical.

To do it the right way, there is Smartpricing!

Smartpricing is a dynamic pricing and revenue management software that helps you find the best price for your rooms and supports you in your strategies to reduce OTA fees.

Find out now if Smartpricing is right for you!