OTA REVENUE

OTA revenues come from the commissions hotels are charged for the bookings they intermediate. While these used to be around ten percent, commission rates have increased dramatically over the last ten years. Commissions charged by OTAS are typically 15-30 percent of the value of the stay, although there is anecdotal evidence that they are sometimes even higher than this. In the UK, commissions are generally paid on the VAT inclusive rate so the actual commission costs to hotels are closer to 18-36 percent. Booking.com further supplements these commissions by asking hotels to pay for preferential placing – typically a further three percent. OTAS spend a large proportion of the commissions that they collect on metasearch where they bid against the hotels that pay them the commission.