Direct Bookings or OTAs? How Sales Channels Affect Your Hotel's Profitability

Booking platforms bring in guests who might not reach you any other way, but they take a fee for every booking. The question that matters to an owner is not “Should I leave the platforms?” but: what mix delivers the highest net revenue after all costs, without sacrificing occupancy?

How do platform commissions work?

In the most common model, the property pays the platform a commission on every completed booking, calculated as a percentage of the booking value. The rate varies between platforms, and depends on the agreement and on any paid visibility programmes the property joins.

What many owners overlook is that the commission is not the only cost of selling. There are also:

• Online payment fees on direct channels.
• The cost of the website, the booking engine and advertising.
• Team time spent managing accounts and rates and responding to guests.

So it is not enough to compare “the platform's commission” with “zero for a direct booking”; direct bookings have an acquisition cost too.

Net rate: the number you should track

A hypothetical example for illustration only; the percentages are not any platform's rates.

Two bookings at SAR 300 per night:

Channel	Rate	Hypothetical cost of sale	Net to the property
Booking platform	300	15% = SAR 45	SAR 255
Direct booking	300	5% = SAR 15 (payment and advertising)	SAR 285

The difference is SAR 30 per night. Across hundreds of nights a month, the impact becomes tangible. But if the platform is what brought the guest in the first place, the alternative is not a direct booking but an empty room. That is why the decision is not to cut a channel, but to manage the mix.

A healthy channel mix

There is no single ideal ratio for every property. The right mix depends on:

• Location and demand: a property near business districts may rely on corporate accounts, while one in a tourist area may rely more on platforms.
• Guest type: first-time visitors usually search through platforms, while returning guests can be attracted directly.
• Length of stay: long and monthly stays are usually handled directly.

What can always be measured is the trend: is the share of direct channels and returning guests growing over time, without occupancy or net rate falling?

Tools to increase direct bookings

A mobile-friendly booking engine

A website that shows rates and availability clearly and completes booking and payment in a few steps. Any friction in the booking process sends the guest back to the platform.

Rate parity and legitimate added value

If the direct rate is higher than the platform's, the guest will not book directly. Review your contractual commitments to the platforms on rates, then consider direct-booking benefits that do not conflict with them, such as more flexible cancellation or priority early check-in.

A guest database

A guest who booked through a platform and stayed with you can come back directly if you have a legitimate way to contact them with their consent. This is where a guest relationship management (CRM) system comes in, together with return campaigns segmented by branch and date of last stay.

Corporate and institutional accounts

Direct agreements with nearby companies reduce reliance on platforms on weekdays.

Visibility in search and maps

An up-to-date business profile, clear pages for each branch and real photos help guests who search for your name reach your website instead of the platform's page.

Manage platforms smartly instead of leaving them

• Review each platform's performance: revenue, commission, cancellation rate and the reviews of the guests it brings.
• Manage rates according to demand: on high-demand days you may need the platforms less; on weak days they become more important.
• Watch paid programmes: extra-visibility programmes raise the effective commission; measure their return before renewing.
• Connect your systems: a channel manager connected to the property management system prevents double bookings and keeps rates consistent.

What should an owner ask when choosing an operator?

Sales channels are among the most important things that set one operator apart from another. Ask:

• What is your channel mix plan for my property? And how will you measure net rate, not just gross revenue?
• Who owns the website, the platform accounts and the guest database when the contract ends?
• Do you have a direct booking engine and a CRM system that you actually use?
• Are marketing and distribution costs included in your fees, or charged to the property?

Mirada works to strengthen direct bookings at its branches through its website, booking engine and guest relationship management system, as part of a stated goal of reducing reliance on external channels.

Frequently asked questions

Should I stop working with booking platforms?

Usually not. Platforms bring in new guests, especially in tourist cities. The goal is to manage your reliance on them, not to drop them.

How do I know whether platform commissions are too high for my property?

Calculate net ADR after commissions for each channel, and compare the platforms' share of total revenue over the months.

Are direct bookings free?

No. They carry payment, marketing and website running costs. But they usually give you a direct relationship with the guest and their data.

What is the first step to increasing direct bookings?

Make sure booking on your website from a mobile phone is easy and fast and that the rate is clear, then start collecting guest data, with their consent, so you can contact them later.

How do I measure success?

Track net ADR, the share of direct channels and the proportion of returning guests, while monitoring occupancy so that channel improvements do not come at its expense. These indicators are explained in detail in our article on hotel KPIs for owners.

Next step

If your property relies heavily on booking platforms and you would like to discuss operating and sales options, you can contact the Mirada team.