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OTA in hotels: what an online travel agency is and what it costs

An OTA is a website that sells hotel rooms for a commission, such as Booking.com, Expedia, Airbnb or Agoda. How OTAs work, what they cost and how they connect to a PMS.

Updated By the LobbyMind team

An OTA, or online travel agency, is a website or app where travellers search and book hotel rooms, such as Booking.com, Expedia, Airbnb and Agoda. The hotel lists its rooms and prices, the OTA brings the guest, and the hotel pays the OTA for each booking.

How an OTA is paid

Most OTAs charge a commission: a percentage of the booking's value, agreed in the hotel's contract with each site. The rate depends on the OTA, the country and the programme you join, so check your own contract rather than an average.

Worked example

A guest books 3 nights at 100 a night through an OTA that charges your property 15% commission.

  • Booking value: 3 × 100 = 300
  • Commission: 300 × 15% = 45
  • What the hotel keeps: 300 − 45 = 255

So the ADR you really earn on that booking is 85, not 100.

Why it matters to a small property

OTAs reach travellers a small hotel could never reach alone, which is why most properties list on at least one. The cost is the commission, and the risk is selling the same room twice when bookings arrive from several sites at once. That is called overbooking.

The fix is to keep one calendar of free rooms and send it to every OTA. A channel manager does that: it sends your prices and availability out and brings each OTA booking back as a reservation.

LobbyMind connects to OTAs through its channel manager connection, so a Booking.com or Airbnb booking appears on the calendar without anyone typing it in, and the room closes on the other sites.

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