InsightsGuesthouses

What OTA commission actually costs you

Easy to say, hard to feel. Here it is in rands.

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A guesthouse taking bookings through the large travel platforms typically pays fifteen to twenty percent. Fifteen percent is easy to say and hard to feel, so here it is in rands.

The arithmetic

A room at R1,800 a night, sixty percent occupancy, ten rooms. That is roughly R3.9 million a year in room revenue.

Say seventy percent of those bookings come through a platform at eighteen percent commission. That is about R495,000 a year paid in commission. Not profit — revenue, off the top, before you have paid for one sheet or one slice of bread.

Move a third of those bookings to direct, and you keep roughly R165,000. That is a staff member. That is a refurbishment. That is the difference between a hard year and a comfortable one.

Why direct is hard

Booking.com and Airbnb are very good at what they do. They spend enormously to be the first result on Google, and they hold the customer relationship. Many of their contracts also stop you undercutting your own listed rate.

But the thing they cannot own is the guest who already knows your name. Think of the guest who stayed last year, or came on a friend's word, or searched your name. That guest is yours if you make it easy, and theirs if you don't.

What actually shifts it

  1. Be findable by name

    When somebody searches your guesthouse by name on Google, your own site should be the first result. Not a platform listing that then charges you 15 to 20 percent for the booking.

  2. Make direct booking obviously better

    Not cheaper, if your contract forbids it — better. A late checkout. A bottle on arrival. Something concrete a returning guest values.

  3. Keep the relationship after checkout

    The platform owns the first booking. You own every one after it — if you have their details and a reason to get in touch.

  4. Watch the number, not the feeling

    Track what percentage of bookings arrive direct, every month. If you cannot state that percentage each month, you cannot manage it. It is the most valuable number in the business.

Where to start

Work out your own version of the arithmetic above, for a full year. Your real rate per night, real occupancy, real commission percentage. Most owners have never written it down, and the figure is usually larger than they expect.

Then decide what a third of it would be worth to you.

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