OTA commission is the quiet rent many independent hotels pay on their own demand. This post runs simple, honest math for a 20–40 room property in India — then shows how to shift the mix without burning your distribution.
Illustrative numbers only. Use your ADR, occupancy, and real OTA invoices for decisions.
The commission line everyone underestimates
Assume:
- Average daily rate (ADR): ₹3,000
- OTA commission: 20% (middle of the common 15–25% band)
- Commission per OTA room night: ₹600
That ₹600 is gone before staff salaries, power, linen, or GST compliance.
Annual leak at different OTA mixes
Suppose the hotel sells 8,000 room nights / year (roughly a busy 25‑room house — adjust to your reality).
| Share of nights via OTA | OTA nights | Commission @ 20% × ₹3,000 |
|---|---|---|
| 80% | 6,400 | ₹38.4 lakh |
| 60% | 4,800 | ₹28.8 lakh |
| 40% | 3,200 | ₹19.2 lakh |
| 20% | 1,600 | ₹9.6 lakh |
Moving from 80% → 40% OTA mix (same total nights, same ADR) is not a branding slogan — it is on the order of ₹19 lakh / year kept in the business in this example.
Even a smaller shift — 10 percentage points off OTA (800 nights) — saves about ₹4.8 lakh / year here.
Direct is not “free demand”
Direct bookings still cost something: website, software, WhatsApp time, maybe ads. The point is the unit economics:
| OTA night | Direct night (same ADR) | |
|---|---|---|
| Guest pays | ₹3,000 | ₹3,000 |
| Platform cut | ~₹600 | ₹0 commission to an OTA |
| You keep (before your own costs) | ~₹2,400 | ₹3,000 |
You can even offer a small direct perk (breakfast, late checkout) and still beat OTA net.
A sane strategy (do not “quit OTAs” overnight)
- Keep OTAs for discovery — especially new markets and last‑minute fill.
- Make direct easy — your own site, live availability, UPI/Razorpay, mobile checkout.
- Win repeats — reviews, WhatsApp thank‑you, loyalty or “book direct next time.”
- Keep calendars honest — a channel manager so growing direct does not create double bookings.
OTAs and direct are not enemies. Unsynced OTAs and a paper front desk are.
Where BitLegacy fits
BitLegacy is built so independent hotels can run:
- Front desk & billing (PMS)
- A guest website with booking engine for commission‑free stays
- Channel sync so OTA inventory stays aligned
See pricing for plan ranges (Starter from ₹299/mo for 2 rooms; Growth ₹999/mo for ≤10), or start a free trial and measure your own OTA vs direct mix for a month.
To collect advances on your site the way Indian guests already pay, see UPI / Razorpay on the hotel booking engine.
Related reading
- UPI & Razorpay hotel website payments
- Airbnb commission vs direct for hosts / farmhouses
- Booking source mix method (BitLegacy sample)
- Hidden ways hotels leak revenue
- Hotel software checklist for India
- Setting room rates
Run your numbers once. Most owners who do never look at “just one more OTA booking” the same way again.
About the author
Captainjeet Kaur
Managing Director, BitLegacy Solutions LLP
Captainjeet Kaur leads BitLegacy Solutions LLP, the team behind BitLegacy Hotels — hotel management software for independent Indian hotels — and writes about running and growing hotels with simple, practical technology.
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