The Real Cost of Booking.com: A €234,000 Wake-Up Call

The Commission That’s Quietly Bankrupting Your Hotel

Every time your reservation notification pings, you probably get a dopamine hit. But have you ever stopped to calculate how much of that booking actually lands in your bank account? For most independent hotels, the answer is terrifying: OTA commissions aren’t just a marketing cost, they are the single biggest threat to your EBITDA.

The lobby is bustling. The housekeeping team is running at full capacity. Your occupancy rate is hovering around a healthy 85%, and on paper, your revenue looks solid. Yet, when you look at the bank account at the end of the month, the cash flow doesn’t match the activity level. Where is the money going?

It’s vanishing into the digital ether, wired directly to Amsterdam and Seattle.

For years, hotel owners across the Nordics and EMEA have accepted OTA (Online Travel Agency) commissions as a necessary evil. We treat the 15–20% cut taken by Booking.com and Expedia as a “marketing tax”—the cost of doing business. But it’s not a tax. It is a dependency that is bleeding your profitability dry.

At Resaco, we are obsessed with revenue growth. But revenue without profit is just vanity. True growth means keeping more of what you earn.

In this analysis, we are going to do the math that the OTAs hope you never do. We will break down exactly how a standard commission structure cannibalizes your net profit, why the industry landscape has shifted regarding rate parity, and how you can reclaim that margin.

This isn’t about deleting your Booking.com account today. That would be suicide. We simply want to show you the reality of your P&L and realize that your “partner” is actually your most expensive employee.

The Visible Cost: The Invoice You Pay Every Month

Let’s start with the numbers you can see. Every month, you receive an invoice from Booking.com. It’s usually a painful moment, but most hoteliers glance at the total, grimace, and pay it.

To understand the scale of this financial drain, we need to look at a hypothetical, yet entirely typical—scenario. Let’s look at “Hotel Aurora,” a successful 35-room boutique property in Finnish Lapland.

The “Hotel Aurora” Scenario

• Annual Revenue: €2,000,000
• OTA Dependency: 65% (A standard figure for independent hotels without a strong direct booking strategy)
• Average Commission: 18% (A blended rate accounting for base commission + Preferred Partner status + Genius overrides)

The Calculation: If 65% of the €2M revenue comes through OTAs, that means €1,300,000 of the hotel’s income is subject to commission.

• €1,300,000 x 18% = €234,000

The Reality Check: Take a moment to let that number sink in. €234,000.

That is not “marketing spend.” That is the annual salary of a General Manager, a Sales Manager, and a part-time marketing coordinator combined. That is the cost of renovating 10 bathrooms. That is pure margin, leaving your business.

And what did you get for nearly a quarter of a million euros? You got bookings, yes. But you didn’t get the customer data or the brand loyalty. You rented a customer for a night, and you paid a premium to do it.

The Invisible Costs: What the Invoice Doesn’t Show

If the monthly invoice was the only cost, the situation would be bad, but manageable. Unfortunately, the €234,000 figure is just the tip of the iceberg. The real damage to your hotel’s financial health happens below the surface, affecting your Average Daily Rate (ADR) and Guest Lifetime Value (GLV).

1. The “Genius” Trap and Discount Stacking

Booking.com’s Genius program is a masterclass in psychology. To be visible on the platform, you are encouraged to join Genius Level 1, offering a 10% discount to users. Then, you are nudged to offer a “Mobile Rate” to capture phone bookings, typically another 10% off.

The Math of Stacking: Discounts on these platforms are generally applied multiplicatively. Let’s say your room rate is €200.

• Genius Discount (10%): -€20. New rate: €180.
• Mobile Rate (10% on the €180): -€18.
• Final Rate to Guest: €162.

Now, Booking.com takes their commission on the final price.

• Commission (18% on €162): -€29.16

Net Revenue to Hotel: €132.84.

You started with a €200 room. You received €132.84. That is a 33.6% reduction in revenue.

The invoice only shows the €29 commission. But the real cost to your business was €67.16 per night. You are simply eroding your pricing power.

2. The Data Blackout

When a guest books through an OTA, they are not your customer. They are Booking.com’s customer.

OTAs protect their asset, the user data, by masking guest email addresses (using aliases like <guest-alias>@guest.booking.com). This creates a Data Blackout that costs you money in two specific ways:

• No Pre-Arrival Upsell: You cannot effectively email the guest to offer a room upgrade or a champagne package. Direct guests often spend 20–30% more on ancillary services because you can communicate with them.
• No Post-Stay Retention: You cannot email them a “Thank You” offer. To get them back next year, you have to wait for them to use the OTA again—and pay the 18% commission a second time.

3. Brand Erasure and Commoditization

To the OTA guest, your hotel is a commodity filtered by price and location. They didn’t fall in love with your brand story; they fell in love with the deal.

This makes it difficult to build Guest Lifetime Value (GLV). Internal data from Resaco clients consistently suggests that direct booking guests have significantly higher lifetime value than OTA guests, often because you own the relationship and can drive repeat visits without paying a “toll” every time.

Commission vs. EBITDA: The Profit Killer

This is where the math gets uncomfortable. You don’t pay your bills with revenue. You pay them with Profit.

To understand the true impact of OTA commissions, we must look at them in relation to your EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).

The Profit Margin Multiplier Effect

Let’s go back to Hotel Aurora.

• Room Rate: €200
• Variable Costs (Cleaning, Linen, Amenities, Breakfast, Energy): €60

Scenario A: Direct Booking

• Revenue: €200
• Cost of Acquisition (Google Hotel Ads + SEO): ~€10 (approx. 5%)
• Variable Costs: €60
• Contribution Margin: €130

Scenario B: OTA Booking

• Revenue: €200
• Commission (18%): €36
• Variable Costs: €60
• Contribution Margin: €104

The difference is €26 per night.

It doesn’t sound like much until you scale it against your profit targets. If your hotel aims for a healthy 20% Net Profit Margin overall (€40 on a €200 room), the OTA commission of €36 is nearly equal to your entire target profit.

When you pay 18% of revenue to an OTA, you aren’t giving them 18% of the pie. You are often giving them 50% to 90% of your actual Net Profit from that booking.

“But I Need the Visibility” (The Billboard Effect Myth)

We hear this objection constantly: “But if I’m not on Booking.com, I don’t exist. People see me there and then book direct.”

This is the “Billboard Effect.” While industry studies from a decade ago validated this, data from 2024 and 2025 suggests the effect has diminished and evolved.

Why? The OTAs closed the loop. Their apps are fast, save credit card details, and offer loyalty perks (Genius/OneKey) that keep users inside their ecosystem. If your website is slow or hard to navigate on mobile, the user will treat your site as a brochure—check the photos, then go back to the app to book.

However, the legal landscape has changed in your favor. Following the implementation of the Digital Markets Act (DMA) in the EU, gatekeeper platforms like Booking.com can no longer enforce “narrow” parity clauses. You are now legally allowed to offer lower prices on your own website.

The question is: Are you using this freedom?

How to Stop the Bleeding (Without Going Cold Turkey)

The solution is not to disconnect your hotel today. OTAs serve a purpose for reaching new markets and filling last-minute inventory. The goal is rebalance, not elimination.

We need to shift your dependency ratio.

• Current State: 70% OTA / 30% Direct
• Target State: 40% OTA / 60% Direct

The Resaco Approach: The Shift

How do we move 30% of your bookings from high-cost channels to low-cost channels?

1. Price for Profit: Leverage your DMA rights. Offer a better rate direct. Even a small difference drives conversion. If you can’t drop the rate, add value (e.g., “Free Breakfast” or “Late Checkout”) exclusively for direct bookers.
2. Invest in Your Assets: You need a high-converting website. If your booking engine is harder to use than Booking.com, you lose.
3. Metasearch is Mandatory: Google Hotel Ads puts your direct price right next to the OTA price on Google Maps and Search. If you aren’t there, the OTA wins by default.
4. Capture the Data: Implement a strategy to capture emails before the booking (e.g., a “Download our Local Guide” lead magnet) to market to guests directly.

The Impact of the Shift: If Hotel Aurora shifts just 20% of its OTA bookings to Direct:

• €400,000 in revenue moves from 18% commission to ~5% acquisition cost.
• Savings: €52,000 per year.

That is €52,000 straight to your bottom line. That’s your new kitchen. That’s your staff bonus. That’s your profit.

Conclusion: Do You Know Your Number?

The hospitality industry has been lulled into complacency, accepting that giving away 18–20% of revenue is “just how it works.”

It isn’t.

Every 10% shift from OTA to Direct adds tens of thousands of euros to your EBITDA. But you can’t fix what you don’t measure. You need to know exactly how much the OTA tax is costing you—not just in monthly invoices, but in lost profit and lost lifetime value.

Stop guessing. Stop accepting the “tax.” It’s time to take control of your distribution.

Do you know exactly how much margin you’re losing this year?

We have built a tool specifically for independent hotels to visualize this loss. Plug in your revenue, your commission rate, and your dependency ratio, and see the uncomfortable math for yourself.

Book a short call with us