Category: Leisure

Most independent hotels set next year’s marketing budget the same way. Last year’s figure, a bit more if it was a good year, a bit less if it wasn’t.

Meanwhile the biggest marketing cost in the building doesn’t sit on the marketing line at all. It sits under distribution, quietly taking 15 to 25% of every room the OTAs sell.

The cost that isn’t on the marketing line

Commission is the price of winning a guest. It just doesn’t get called marketing. That makes the marketing budget look small and the OTA bill look like an unavoidable cost of doing business. Neither is quite true.

Hospitality Net’s panel of industry experts puts typical hotel marketing spend at under 2.5% of room revenue, staff included. Most of them argue an established hotel should be spending 4 to 6%, and a new or repositioned one a lot more. Their sharper point is that a percentage is a sanity check, not a strategy. Start from the gap you’re trying to close.

Start from the gap, not the percentage

The question isn’t how much you should spend on marketing. It’s how much of your OTA business you want to bring direct, and what that’s worth. Work that out and you know what you can afford to spend winning it.

What to put in it, in order

• The website and booking engine. Unglamorous, and first. If your own site is slower, clunkier or dearer than the OTA, every other pound you spend sends people there instead.
• Your own name in search. Plenty of guests already know which hotel they want and search for it by name. Make sure they land on your site, not an OTA listing above it. Metasearch and brand search are often the cheapest direct bookings you’ll buy.
• Past guests. Email to people who’ve already stayed costs almost nothing per booking. Most independents have years of guest data and send it nothing between stays.
• A reason to book direct. Rate parity means you usually can’t just be cheaper. You can offer something the OTA can’t. We’ve written about why a free breakfast isn’t it.
• Your need periods. Put PR and campaign spend against the shoulder months and the gaps in your calendar, not the weekends that sell themselves.
• Measurement. Track cost per direct booking against what the same booking would have cost in commission. Monthly, in a spreadsheet if that’s all you’ve got.

What gets cut first, and shouldn’t

When budgets get squeezed, the same three things tend to go first: guest email, photography and website upkeep. They’re the three that keep direct bookings coming in the year after. Cut the brochure reprint instead.

When to decide

Most independents set budgets between September and November. That’s the window to make the case to owners, with time left to get something in place for spring. If you need to prove it first, ask for a 90-day test with one clear measure: direct share, and cost per direct booking against commission.

GoodFolks works with independent hotels and hostels on exactly this: moving commission spend into direct bookings and measuring it properly. Here’s what we do for hotels, and why nobody books direct for a free breakfast.

For most independent hotels, OTA commission is the biggest variable cost in the business. It’s bigger than housekeeping and card fees, and often bigger than the utilities.

In 2026, commission on a hotel booking typically lands between 15% and 25% of the room revenue, with most properties paying somewhere around 15% to 18%. Ten years ago the average was nearer 10%. It only goes one way.

So every booking you move from an OTA to your own website is money straight back in your pocket. The question is how.

Don’t quit the OTAs

First, the honest bit. OTAs still drive around 63% of independent hotel bookings, and they reach guests you’d never find on your own. Walking away from them isn’t the answer.

The smarter way to think about commission is as the cost of finding a new guest. Let the OTAs do the finding. Then win the booking direct wherever you can, especially repeat guests, people searching your name and anyone who clicks through to your website to have a look.

Why “cheaper direct” doesn’t always work

In the UK, many OTA contracts still include rate parity, which stops you showing a lower price on your own site than on the OTA. Even where you can undercut, a price war with a company that size isn’t one an independent wins.

And the free breakfast most hotels reach for isn’t special either. Booking.com’s Genius scheme already gives loyal guests up to 20% off, often with free breakfast or an upgrade stacked on top. The guest can get it on the OTA anyway.

Parity usually covers the price, though, not what comes with it. That’s where the real opportunity is.

Here’s the maths on a small example. Say your average room is £150 and you pay 18% commission. That’s £27 a booking. Put 1,000 bookings a year through the OTAs and you’re paying £27,000. Move just 10% of those direct and you’ve kept £2,700, which buys a lot of prizes.

What an independent can offer

You don’t need a holiday for two. You need something that feels like a treat, not a line in the small print.

• A bottle of something in the room on arrival. Local if you can.
• Proper chocolate on the pillow. Something from a good local maker, not a foil-wrapped mint.
• Late checkout, guaranteed. Worth more to most guests than anything on a menu.
• An upgrade when one’s free. It costs you nothing if the room would sit empty anyway.
• A prize draw. A free night, a dinner, a spa day. Direct bookers only.
• Something local. A drink at the bar, a discount at the restaurant down the road, a map of your favourite places.

A complimentary bottle, really good chocolate or a chance to win means more to me than a free breakfast. Breakfast feels like admin. The others feel like someone’s pleased you came.

Make sure people actually see it

Plenty of guests find you on an OTA and then look at your website before they book. If your site doesn’t say, clearly and near the booking button, what they get for booking direct, they’ll go back to the tab they came from.

So put the offer on your homepage and your booking page. Mention it in the confirmation email. Tell OTA guests at check-in, so they know what they’ll get next time.

One more reason to go direct

Direct guests are also more likely to turn up. OTA cancellation rates reached 21.8% in 2025, more than double the 10.6% for direct bookings. So you pay commission on OTA bookings that are twice as likely to disappear.

GoodFolks works with independent hotels and hostels on direct bookings, measured against what the OTAs actually cost. Here’s what we do for hotels, and what to put in next year’s hotel marketing budget.