Measurement and budget

How Much Should an Independent Hotel Spend on Marketing?

By MarginStay7 min readPublished Updated

Short answer

There is no official rule. Hotel marketing experts writing on Hospitality Net in 2025 suggested about 4% to 10% of revenue for an established hotel, and more for a new one. For an independent hotel, the more useful comparison is what booking sites already cost, which is often several times the marketing budget.

Owners set next year's budget in the autumn, and marketing is often the line that gets guessed. This guide gathers what named experts and industry data say, then puts it next to what a typical hotel already pays booking sites. Where a figure is an opinion, we say whose it is.

What percentage of revenue should a hotel spend on marketing?

Most published advice falls between 4% and 10% of revenue for an established hotel. In a 2025 panel on Hospitality Net:

  • Adam Mogelonsky, partner at Hotel Mogel Consulting, called 5% to 10% of total revenue an industry average that makes sense for budgeting.
  • Max Starkov, a hospitality technologist, argued that hotels should spend at least 4% to 6% of total revenue, not including payroll.
  • Frederic Gonzalo of Gonzo Marketing put a hotel in its launch stage at 15% to 25% of expected revenue, falling to 5% to 10% or less once it is well established.

These are expert opinions, not a standard. They also differ on what counts: some include staff, some do not.

How much do US hotels actually spend on marketing?

Less than the advice, once franchise fees and staff are taken out. In the same panel, Starkov cited STR data showing US hotels spend under 2.5% of room revenue on marketing, including sales and marketing payroll. CBRE's research shows where the money goes. In 2019, sales and marketing department costs at hotels with on-site sales staff came to 9.2% of total revenue, but franchise fees made up 48.8% of those costs and salaries, wages and benefits another 28.5% (CBRE, 2021). Those hotels averaged 214 rooms, so a small independent hotel will look different.

Meanwhile, what booking sites cost keeps rising. CBRE found that agency commissions rose 6.0% in 2024, the biggest cost increase in hotel rooms departments, while total hotel revenue rose 2.3% (CBRE).

How does a marketing budget compare with a commission bill?

Take the 60-room hotel used in direct booking vs OTA: what each booking really costs. It has 62% occupancy and a $160 average rate, close to the US averages CoStar reported for 2025 (Hotel Management), and about $2.17 million a year in room revenue. If 52.7% of its bookings come through booking sites, the share Cloudbeds reported for North American independent hotels in 2025 (PhocusWire), about $1.14 million a year comes through them.

ItemPer yearShare of room revenue
Marketing at 4% of room revenue$86,8994.0%
Marketing at 6% of room revenue$130,3496.0%
Booking-site costs at 25%$286,22413.2%

Illustrative. Uses room revenue only and excludes taxes. Booking-site costs include add-ons, at the middle of the usual 20% to 30%.

The booking-site bill is more than double the whole marketing budget at 6%, and more than three times it at 4%. It is also easy to miss, because under some booking models it is taken from the payment before the hotel sees the money (see how much Expedia charges hotels).

Why do booking sites outspend hotels on marketing?

Because marketing is their business. Expedia Group's 2025 annual report shows $7.35 billion of direct selling and marketing costs in 2025, 49.9% of its revenue. Booking Holdings' 2025 annual report shows $8.19 billion of marketing expenses, 30.4% of its revenues. Commissions from hotels are part of the revenue behind that spending.

How should an independent hotel set its marketing budget?

  1. Start from your commission bill. Add up last year's booking-site costs, including add-ons. Our guide to the real cost of an OTA booking lists what to include.
  2. Decide how many bookings you want to move direct. For the hotel above, moving even 5 points of room revenue is worth more than $18,000 a year in the main case (see the sums in direct booking vs OTA: what each booking really costs).
  3. Budget by cost per booking, not by percentage alone. A channel deserves more money if each booking it brings costs less than a booking site. Through MarginStay, a direct booking usually costs 8% to 12%.
  4. Track every booking to its source before raising spend. See tracking which ad brought a booking.
  5. Spend more ahead of quiet periods and in new markets, and review the numbers every month.

Read Google Hotel Ads for small hotels for what a booking from Google can cost. For social ads, read Facebook and Instagram ads for hotels. To run the numbers for your own hotel, use the savings calculator.

MarginStay helps independent hotels bring in direct bookings, so we have a stake in this topic. Budget ranges are the named experts' opinions. Spending figures come from CBRE, STR as cited on Hospitality Net, and the companies' own annual reports. The 60-room example is illustrative.

Marketing budget: quick answers

What percentage of revenue should a hotel spend on marketing?

There is no official rule. Experts on a 2025 Hospitality Net panel suggested about 4% to 10% of revenue for an established hotel, depending on whether staff costs are included, and 15% to 25% of expected revenue for a hotel in its launch stage. Set yours by what each booking costs, not by a percentage alone.

How much do US hotels actually spend on marketing?

Less than the advice suggests. STR data cited by Max Starkov on Hospitality Net in 2025 puts US hotels under 2.5% of room revenue, including sales and marketing payroll. CBRE found that in 2019, franchise fees and staff made up more than three quarters of sales and marketing costs at hotels with on-site sales teams.

Should OTA commissions count as marketing spend?

They are a cost of winning guests, so count them when you compare channels, even if your accounts keep them on a separate line. For many independent hotels the commission bill is bigger than the whole marketing budget. In our 60-room example it is about $286,000 a year, against $87,000 to $130,000 of marketing.

How much should a new hotel spend on marketing?

More than an established one, because few travelers know it yet. Frederic Gonzalo, writing on Hospitality Net in 2025, put the launch stage at 15% to 25% of expected revenue, sometimes more, falling to 5% to 10% or less once the hotel is well established in its markets.

See what your commission bill could pay for

Enter your monthly booking-site bookings and commission in our calculator, then talk to us about a marketing plan built around cost per booking.

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Sources