What OTAs really cost

Why OTA Bookings Cancel Twice as Often as Direct Bookings

By MarginStay10 min readPublished Updated

Short answer

Cloudbeds' 2026 report, built on 90 million bookings, found that 21.8% of OTA bookings at the independent hotels in its data were cancelled in 2025, against 10.6% of direct bookings. Booking.com charges no commission on cancellations made inside your free cancellation period, so the real cost is the room you have to sell again.

A cancelled booking rarely shows up on your commission invoice, but it shows up in your occupancy. This guide covers how often booking-site bookings cancel, what that costs a hotel, the rules that limit what you can change, and the steps Booking.com itself suggests. The figures come from Cloudbeds' 2026 report, and the terms from Booking.com's own pages and California law, all read on October 5, 2026.

How often do OTA bookings cancel compared with direct bookings?

About twice as often. Cloudbeds, which sells hotel software, publishes a yearly report on independent hotels. Its 2026 edition, released March 25, 2026 and built on 90 million bookings at tens of thousands of properties in 180 countries, found that OTA cancellation rates hit 21.8%, more than double the 10.6% rate for direct bookings (Cloudbeds' announcement).

In plain numbers: of every 100 bookings that come through booking sites, about 22 cancel. Of every 100 made direct, about 11 do.

The same report shows guests booking and cancelling earlier. The average booking window was 40 days in 2025, and 48 days in North America. The average cancellation window, meaning how long before arrival a guest cancels, grew from 34.6 days in 2023 to 38.7 days in 2025 (Cloudbeds' report page). Earlier notice gives you more time to sell the room again.

These are global figures

Cloudbeds gives the 21.8% and 10.6% rates across its whole data set, not for the US alone. Its full report, behind a sign-up form, breaks cancellation rates down by channel and country. Your own figures by channel are the better guide, and the last section shows how to get them.

What does a cancelled OTA booking cost a hotel?

Usually not commission. Booking.com's General Delivery Terms say that cancellations made before a cancellation fee applies attract no commission (clause 2.6.3), and that commission is charged on a charged cancellation or a charged no-show (clause 2.3.3). Its Partner Hub page on commission adds that fees you charge for cancellations and no-shows count as part of the booking amount commission is charged on (Partner Hub).

The real cost is the empty room. A room held for a guest who cancels is a room you did not sell to someone else, and the closer to arrival the cancellation comes, the harder it is to fill.

Take an illustrative case: 100 booking-site bookings and 100 direct bookings, each a 3-night stay worth $480 before taxes. At the Cloudbeds rates, about 22 booking-site stays cancel against about 11 direct ones, so 11 more rooms come back to you. If you sell three in four of those rooms again, about 3 stays are lost, around $1,340 of room revenue for every 100 booking-site bookings, before the time spent reselling them.

And if the replacement guest also books through a booking site, that booking carries its own commission.

Why do booking-site bookings cancel more often?

The Cloudbeds figures show the gap, not the reason. Booking.com's own guidance points to factors a hotel controls. Its page on the cancellations characteristics report says reservations made in longer booking windows on a flexible policy are typically the ones more likely to be cancelled (cancellations report page). Its advice page on managing cancellations says guests who pay online are four times less likely to cancel or not show up (advice on managing cancellations).

So the policy and payment terms on each rate matter as much as the channel. Check them rate by rate before blaming the booking site.

What limits how a US hotel can set its cancellation policy?

  • Rate parity. Under Booking.com's wide parity wording, which applies to US hotels, Booking.com should get the same or better restrictions and policies, including cancellation policy, as you offer on your own website, by phone, at the hotel and on other booking sites (General Delivery Terms, Annex 5). So a public offer of free cancellation only for guests who book direct is a parity question. Our guide to rate parity for US hotels explains the clause and the members-only exception.
  • Ranking. Booking.com's ranking annex in the same terms lists gross bookings (including cancellations) and net bookings (excluding cancellations) among the things its search results prioritize, and says conversion can be affected by your policies. A policy change can move your listing, not just your cancellation rate.
  • California law. California Civil Code section 1748.81, added by Senate Bill 644 (2023), requires hotels and third-party booking services to let a guest cancel a reservation for a California hotel without penalty for at least 24 hours after it is confirmed, if it was made 72 hours or more before check-in. The refund must reach the original form of payment within 30 days. It applies to reservations confirmed from July 1, 2024, and does not cover negotiated rates that were not offered to the general public. Booking.com says it applies this 24-hour period to bookings at California properties (California and Minnesota rules page). This is not legal advice, so check how it applies to you.

How can a hotel reduce OTA cancellations?

Booking.com publishes its own suggestions on its Partner Hub. These are the ones a small hotel can act on this week:

  1. Offer both a flexible and a non-refundable rate. Booking.com says offering both helps meet different travelers' needs and can increase bookings (page on setting cancellation policies). Its page on setting up a Non-Refundable Rate says that with a non-refundable rate, guests pay the full price if they cancel, make changes or do not show up, and that adding one can reduce cancellations. Booking.com also suggests a clear price difference between the two, so guests decide whether free cancellation is worth paying for (advice on managing cancellations).
  2. Choose the free cancellation deadline yourself. Booking.com recommends allowing free cancellation one to two days before check-in, if that fits your business.
  3. Tighten the dates that need it. Temporary policy exceptions change the policy for selected dates only, such as events or high-demand periods, and leave the standard policy on every other date.
  4. Secure part of the payment. Booking.com suggests prepayment and deposit policies, for example pre-authorizing the first night, and offering online payment.
  5. Answer guest messages quickly. Booking.com says guests who do not get a timely reply may cancel and book somewhere else.
  6. Read your cancellations characteristics report in the Extranet, under Analytics. It shows in which booking window and how long before check-in your cancellations happen, compared with similar properties nearby.

Expedia does not publish its hotel terms, so check cancellation and commission rules in your Expedia agreement and Partner Central. For how Booking.com treats no-shows and late cancellation fees on your invoice, see how much Booking.com charges hotels.

How do direct bookings change the picture?

On Cloudbeds' figures, direct bookings cancelled at about half the rate. They also cost less to win: a booking site usually costs 20% to 30% of a booking once add-ons are counted, while a direct booking through MarginStay usually costs 8% to 12%. Our comparison of direct booking vs OTA: what each booking really costs works through the sums, and the real cost of an OTA booking lists every cost beyond the commission.

Measure your own gap every month. In your property management system or channel manager, divide cancelled bookings by all bookings made, for each channel. If one booking site cancels far more often than the others, its real cost is higher than its commission rate. To see what moving bookings to your own website is worth, try the savings calculator.

MarginStay helps independent hotels bring in direct bookings, so we have a stake in this topic. Figures come from Cloudbeds' 2026 State of Independent Hotels pages, terms from Booking.com's General Delivery Terms and Partner Hub, and the California rule from the bill text, all read on October 5, 2026. The $480 example is illustrative. This is not legal advice.

OTA cancellations: quick answers

What is the average OTA cancellation rate for hotels?

Cloudbeds' 2026 State of Independent Hotels report, built on 90 million bookings in 180 countries, found that 21.8% of OTA bookings were cancelled in 2025, against 10.6% of direct bookings. These are figures across its whole data set, not for the US alone, so compare them with your own cancellation rate by channel.

Does Booking.com charge commission on cancelled bookings?

Not when the guest cancels before a cancellation fee applies. Booking.com's General Delivery Terms say those cancellations attract no commission. It does charge commission on charged cancellations and charged no-shows, because the fee you charge counts as part of the booking amount. Mark no-shows and waived fees in the Extranet on time.

Can a hotel offer free cancellation only on its own website?

Check your contract first. Booking.com's wide parity wording, which applies to US hotels, says Booking.com should get the same or better restrictions and policies, including cancellation policy, as you offer on your own website and other channels. A public free cancellation offer for direct bookers only may therefore be a parity issue.

How can a hotel reduce last-minute cancellations?

Booking.com suggests offering both flexible and non-refundable rates with a clear price difference, setting the free cancellation deadline yourself, using temporary policy exceptions for busy dates, taking a deposit or online payment, and answering guest messages quickly. Its cancellations characteristics report shows when your cancellations happen compared with similar properties nearby.

Do California hotels have to allow free cancellation?

For reservations made 72 hours or more before check-in, California Civil Code section 1748.81 requires hotels and booking services to allow cancellation without penalty for at least 24 hours after the booking is confirmed. Refunds go back to the original payment within 30 days. Some reservations, such as negotiated rates not offered to the public, are exempt.

See what cancellations and commission cost you

Enter your booking-site bookings in our calculator, then talk to us about bringing more guests to your own website, where bookings cancel less.

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