How Do I Reduce My Dependence on OTA Commissions? | Sarah Colgate

You do not fix OTA dependency by walking away from the platforms. You fix it by knowing what each channel actually costs you, then shifting the mix on purpose.

I have been in and run tourism businesses for over 20 years. I have paid the OTA commissions myself, watched them climb, and felt that thing every operator feels at the end of a busy month, where the calendar was full and the margin still was not there. So I want to be straight with you about this. The OTAs are not the enemy. They bring you bookings you would not otherwise get. The problem is not using them. The problem is depending on them without knowing what they cost.

First, know what a booking actually costs you

Most operators can tell me their OTA commission rate. Far fewer can tell me what a booking actually costs them through each channel once everything is counted.

Let’s say a guest books through an OTA at 25% commission. That 25% is the obvious cost. But then there is the merchant fee, the time your team spends managing the listing, the discounting the platform pushes you into, and the fact that the guest is now the OTA’s customer, not yours, so you pay again to reach them next time. Compare that to a direct booking: the cost of the website, the booking system fee, and the marketing it took to get them there. When you put the two side by side properly, the real gap between an OTA booking and a direct booking is usually bigger than operators expect.

You cannot decide which channels to push and which to pull back from until you have that number for each one. This is the first thing to work out.

Then shift the mix on purpose

Reducing OTA dependency is not a single decision. It is moving a percentage of your bookings from the platforms to channels you own, a few points at a time.

Direct demand comes from the things the OTAs cannot give a guest: a reason to book with you specifically, an email list of past guests, a website that makes booking easy, and the repeat and referral business that a good experience earns. None of that happens overnight. But moving even 10% of your bookings from OTA to direct changes your margin in a way that being busier never will, because every one of those bookings keeps the commission in your pocket.

How I know this

When I ran Aquaduck, I shifted online sales from 4% to 47% of turnover, and improved net profit per passenger by 200%. The point was never to ditch the OTAs. They stayed part of the mix. The point was to stop letting them set the terms, and to build direct channels strong enough that I had a choice about how many bookings I sent their way.

The first step is finding your real channel cost

Before you change anything, find out what a booking actually costs you through each channel you use. That one piece of work tells you which channels are worth pushing and which are quietly eating your margin.

The Tourism Business Health Check looks at exactly this, your channel mix and what your OTA dependency is really costing you. It takes about ten minutes and it is free.