What booking-channel commissions really cost, and how to win more direct bookings

How the commission is charged

Most booking channels charge a percentage of each booking. For many hotels it lands somewhere between 15 and 20 percent, and programs that buy extra visibility add a few points on top. It varies by channel, by country and by contract, so the only number that counts is the one on your own statement.

Read that statement with two questions in mind. What is the commission calculated on — the room price alone, or more? And does the channel also take commission on a cancellation fee you keep? The answers change what a booking from that channel is really worth.

A worked example

Take a hotel with 12 rooms. In a year it sells 2,600 room nights at an average of $110. Seventy percent of them, 1,820 nights, come through booking channels at 15 percent commission. That is $30,030 a year in commission. The hotel is made up; put your own numbers in its place.

Now suppose some of those channel nights came in direct instead. A direct booking has no commission, but the card payment has a fee — here 4.5 percent, the same assumptions the calculator on our pricing page uses.

The point is not that channels are bad. Even in the last column, eight in ten channel nights still come through them. The point is that every night that moves to direct is worth its commission minus a card fee, and that adds up quietly over a year. Take off what your software costs, and you have the real figure.

Your own website and booking page come first

A guest who finds you on a channel will often look you up before booking. If your own website has no prices, no availability and no way to pay, they go back to the channel and book there. Winning direct bookings starts with making the direct route at least as easy:

• Live availability and the full price. Show the free rooms for the guest’s dates, with the total including taxes. Not “write to us for a quote”.
• Payment on the spot. A card payment that confirms the booking at once. A request that waits for an email reply loses guests who book at night.
• Your rules, applied. Minimum stays, closed arrival days and the cancellation policy should be enforced by the booking page itself, as the channels do.
• Fast on a phone. Many guests look you up on their phone, often on a weak connection. A heavy page full of large photos sends them back to the channel.

Bringing guests back, without breaking channel rules

Your best source of direct bookings is a guest who has already stayed with you. But a guest who came through a channel is, in the channel’s eyes, still its customer, and most channel contracts set limits. Read yours, and stay on the right side of these lines:

• Do not use the channel’s messages to move a booking. Most channels forbid using their chat or their relay email address to send guests to your own website. Keep those conversations about the stay.
• Check what your contract says about prices. Some channel contracts restrict showing a lower price on your own public website than on the channel. Rules differ by channel and by country, so read the clause before you publish a cheaper direct rate.
• Offer something other than a lower price. A late check-out, breakfast, a transfer or a better room for booking direct is often simpler to offer than a cheaper rate, and guests value it.
• Earn the email address at the property. Ask guests at check-in or on their own stay page whether they want news and offers from you. Write only to those who said yes.
• Make the next stay easy to book. A card in the room, a word at the front desk and an email to the guests who said yes all point to the same place: your own booking page.

Measure it

If you do not know where each booking came from and what each channel really cost, you cannot tell whether any of this works. Look at three numbers every month: the share of nights that came direct, the commission you paid per channel, and what you kept per night after commission and card fees.

How Staywarden helps

On the Complete plan, Staywarden gives your hotel its own website and booking page. Guests see the free rooms with the total including tax and pay by card straight into your own account — no commission to Staywarden. If you already have a website, one line of code adds the live calendar and the card payment to it.

Each channel’s commission is set once and used everywhere: Money shows it as the cost it is, and Analytics shows which channel costs most and what moving 10 percent to direct would save you. Offers by email go only to guests who said yes, with a discount code that opens your booking page already filled in.

The pricing page has a calculator that runs this article’s example with your own numbers.