Direct booking strategy
Direct Booking vs OTA: What Each Booking Really Costs a 60-Room Hotel
An OTA booking usually costs an independent hotel about 20% to 30% of its value once add-ons are counted. A direct booking driven by ads costs less, and through MarginStay it usually costs 8% to 12%. For a 60-room US hotel, moving 10% of annual room revenue from OTAs to direct could save roughly $17,000 to $48,000 a year.
Direct bookings are not free. They cost ads, booking tools and card fees. But they usually cost far less than a booking from a booking site, and the gap adds up quickly. This guide puts real numbers on it for a typical US independent hotel. The costs of booking sites are covered in the real cost of an OTA booking.
What does each $100 of bookings cost through an OTA and direct?
Use 25% for booking sites, the middle of 20% to 30% once add-ons are counted, and 8% for a direct booking through MarginStay, the low end of its 8% to 12% range and the best case. Direct bookings also cost real money, but less. At the top of our range, 12%, a direct booking would still keep $88 of every $100.
| Per $100 of bookings | Through an OTA (25%) | MarginStay (8%) |
|---|---|---|
| Cost of the booking | $25 | $8 |
| You keep | $75 | $92 |
| Net rate on a $160 room night | $120 | $147.20 |
Illustrative. Net rate is the rate you keep after the channel's cost, often called net ADR.
The difference is $17 on every $100, so the hotel keeps $17 more of each $100 that moves.
What does this look like for a 60-room hotel?
Take a 60-room hotel with 62% occupancy and a $160 average rate. Those match US averages in 2025: CoStar reported occupancy of 62.3% and an average daily rate of $160.54 (Hotel Management). That is 13,578 room nights a year and about $2.17 million in room revenue, or about $181,000 a month.
Cloudbeds found that OTAs made up 52.7% of independent hotel bookings in North America in 2025 (PhocusWire). If about half of this hotel's bookings come from OTAs, roughly $1.14 million a year, or about $95,000 a month, comes through booking sites. At 25% that is about $286,000 in commission and other costs a year. We use share of bookings as a stand-in for share of revenue.
What does it save to move some bookings direct?
Suppose the hotel moves 5, 10 or 20 points of its total room revenue from booking sites to direct bookings. The main case assumes booking sites cost 25% and direct costs 8%, a 17-point gap. The range runs from a narrow 8-point gap (20% against 12%) to a wide 22-point gap (30% against 8%).
| Shift to direct | Revenue moved | Saved (25% vs 8%) | Range (8 to 22 points) |
|---|---|---|---|
| 5 points | $108,624 | $18,466 | $8,690 to $23,897 |
| 10 points | $217,248 | $36,932 | $17,380 to $47,795 |
| 20 points | $434,496 | $73,864 | $34,760 to $95,589 |
Illustrative yearly savings for a 60-room hotel with $2,172,480 in room revenue. Excludes taxes.
The shift does not have to be big. Moving just 5 points, about one dollar in every twenty of room revenue, is worth more than $18,000 a year in the main case. The savings also repeat every year, so they grow as more guests come back and book direct.
The calculator on our homepage asks a bigger question: what if all the bookings you get through booking sites cost 8% instead of 25%? Enter your own numbers there.
What do direct bookings cost that OTAs do not show?
Direct bookings cost ad spend to bring guests to your booking page, the fees for your booking tool, and card payment fees. Driving guests with ads means paying for the click or the booking, and results vary by market and season. Kalibri Labs reported in 2017, using 2016 data, that direct bookings had the lowest cost of acquiring business, while OTA business took as much as 6.5 times the investment (Hotel Management, 2017). The data is old, but the direction is consistent with what the newer numbers show.
What about cancellations?
Cloudbeds found that almost 22% of OTA bookings were cancelled, against 10.6% of direct bookings. In plain terms, of every 100 OTA bookings, about 22 cancel. Of every 100 direct bookings, about 11 do. Fewer cancellations means fewer empty rooms to resell, which is worth money that the commission table above does not show.
When do booking sites still make sense?
For filling quiet dates, reaching guests who never search for you by name, and opening a new hotel, booking sites earn their cost. Kalibri Labs' CEO said in 2017 that the best OTA share is about 5% for some hotels and about 25% for others. The goal is a mix you chose, not zero.
How do you start moving bookings direct?
- Know your real cost. Work out what booking sites cost you, using how much Booking.com charges hotels and how much Expedia charges hotels.
- Make yourself easy to find. Get on Google with Google's free booking links.
- Send guests to your own booking page. Ads on Instagram, Google and email can bring travelers straight to it. See our channels.
- Track cost per booking by channel, so you can see what is working.
MarginStay helps independent hotels bring in direct bookings, so we have a stake in this topic. The 8% to 12% range is what a direct booking through MarginStay usually costs. We use 8%, the low end, as the best case in these sums. The example is illustrative.
Direct booking vs OTA: quick answers
Is a direct booking cheaper than an OTA booking?
Usually, yes, but it is not free. An OTA booking typically costs 20% to 30% once add-ons are counted. A direct booking costs ads, booking tools and card fees. Through MarginStay a direct booking usually costs 8% to 12%. Compare what you keep per room night, not only the headline rate.
How many of my bookings should come direct?
There is no single right number. Kalibri Labs' CEO said in 2017 that the best OTA share is about 5% for some hotels and 25% for others. Cloudbeds found OTAs made up 52.7% of independent hotel bookings in North America in 2025, so many hotels can move some volume.
How do I calculate net ADR?
Net ADR is the average rate you keep after commissions and channel costs. Multiply your rate by 1 minus the channel's cost. At $160 and a 25% cost it is $120. At $160 and an 8% cost it is $147.20. Compare it channel by channel.
Do direct bookings cancel less often?
Yes. Cloudbeds found almost 22% of OTA bookings were cancelled in 2025, against 10.6% of direct bookings. That means fewer empty rooms to resell. Cancellation terms and your market still matter, so track it for your own hotel.
Run the numbers for your hotel
Enter your monthly booking-site bookings and commission in our calculator, then talk to us about what direct bookings could look like for you.