OTAs collect anywhere from 15–30% in commissions on hotel bookings. The industry knows this. For fifteen years, I’ve been telling hotel owners and developers that direct relationships are the foundation of a sustainable hospitality business. And yet I’ll admit something that pains me to say: I recently booked a 24-room block for a family reunion through one of them. I know exactly what that commission represents, and I handed one to an OTA without a second thought.
Here’s why. I didn’t want to negotiate. I didn’t want a sales call. I didn’t want to explain my dates, my room types, my budget and my flexibility to a human being whose job is to extract the best possible outcome for their property while I try to do the same for my family. I wanted to see the options, pick the rooms and be done in ten minutes. It let me do exactly that. Two reservations. Twenty-four rooms. 24-hour cancellation policy. No conversation required. The hotel’s own website would have sent me to a sales inquiry form, and a negotiation would likely have ended with an attrition clause for no-shows and a cancellation policy nowhere near as flexible. This is not always a pricing problem. It’s a friction problem.
A few months after booking, I did something most guests would never bother to do—I reached out to the hotel’s sales team directly and offered to move the business back to them. Not because I was looking for a better rate. Not to negotiate. Simply because I wanted to save them the commission and have a direct relationship with the property.
What happened next is the part that should concern every hotel operator and investor reading this.
They asked me for the dates and room types again. What I didn’t know at the time (and what nobody explained) was that OTAs don’t share guest data with properties. The hotel had no access to my existing reservation, but they also didn’t tell me it was the reason I had to share my information all over again. That’s a structural gap the industry still hasn’t solved. But the fix at that moment was free—one sentence explaining why they needed the information again would have changed everything. Instead, what felt like a favor to the hotel began to feel like another burden.
This isn’t a failure of rate strategy. It’s a failure of infrastructure—and in this case, a failure of communication. And it’s costing hotels far more than the commission they’re trying to avoid.
If we can automate revenue management, why are we still hand-selling room blocks?
The Sales Paradox
Our industry has spent decades automating its most complex pricing decisions. Revenue management systems now adjust rates in real time across hundreds of variables. And yet a family wanting 20 rooms for a reunion still must fill out a form and wait for a callback.
The argument for keeping group sales human has always been complex—and some of it is legitimate. A large room block with a 24-hour cancellation policy is a real inventory risk. Twenty-four rooms dumped back into available inventory the night before arrival with no penalty is a revenue management problem that’s genuinely hard to solve at scale. Attrition clauses and stricter cancellation terms exist for good reasons. But for a 20-room family reunion, the question is whether that level of contractual protection is proportionate, and whether the friction it creates is worth the business it costs. In the current climate where travel plans are subject to last-minute changes, flight cancellations and geopolitical uncertainty, flexibility isn’t a nice-to-have. It’s a deciding factor.
In the months since I made this booking, two family members traveling from abroad and one domestic guest have already decided not to come. A single room booked directly often comes with a 24-hour cancellation policy. Move into group territory and suddenly the rules change. With this OTA, I got the competitive rate, the discount and the cancellation flexibility. The hotel’s direct booking process couldn’t have offered me two of those three things even if it had wanted to.
There’s a legitimate reason hotels want group business outside standard transient terms: 24 rooms cancelled last minute with no penalty is a real inventory risk. But that risk deserves a smarter solution than a sales inquiry form. The barrier to automating small group bookings directly isn’t capability—it’s the complexity of getting CRS, PMS, RMS and sales systems talking to each other in real time. That’s a solvable problem. It just requires the will to solve it. A guest who books direct and has a frictionless experience is worth multiples of the commission saved. A guest who books through an OTA and never has a reason to go direct is a recurring cost.
The real issue is friction. And hotels are full of it.
An industry that prides itself on service somehow still manages to put the burden on guests when they should be relaxing. The upsell at check-in. The guilt of declining the room upgrade. The resort fee. The group sales process that makes you feel like you’re applying for something rather than spending money. For me, the OTA removed the pain point that might make me feel like a sales opportunity.
So what would it take to win it back?
Small group and block booking available online, with tiered discounts built in, without a sales inquiry form in sight. Technology that can automate small group bookings directly—presenting options, pricing and flexible cancellation terms without a human in the loop. None of this is conceptually complex. The technology is harder than it should be, but it’s not impossible.
The OTA won my family reunion booking not because it was cheaper, but because it was easier. And in 2026, for a guest who has options, easier wins almost every time. The commission was the cost of that lesson. The question is whether the industry is paying attention or not.
Yvette Jong is the founder and principal of Craft House Consulting, a fully integrated hospitality advisory firm.