Tata Graham Crocombe

💰 A Cornell study indicates that each dollar spent on OTA commissions generates $20.20 in revenue, $7.08 in profit, and a 1.12% occupancy increase. However, the value of OTA commissions varies; for Hotel A at 40% occupancy and below breakeven, the commission is largely incremental and beneficial. Conversely, Hotel B at 80% occupancy above breakeven might lose potential direct bookings, making the commission a margin leak. Hotels annually pay over $50 billion to OTAs, which could otherwise be invested in enhancing direct bookings and guest experiences. Strategic OTA use by hoteliers can fill need periods, access new markets, and attract first-time guests, aiming to increase direct bookings and reduce OTA dependency.