Every hotelier knows OTA commission is “18–25%”. Almost nobody has seen it written down as an annual number for a hotel their size. So let’s do it properly, for a very ordinary property: 20 rooms, ₹3,200 average rate, 70% occupancy across the year, 60% of nights coming from OTAs at a blended 22% commission.
The worked example
| Line | Math | Per year |
|---|---|---|
| Room-nights sold | 20 × 365 × 70% | 5,110 |
| Room revenue | 5,110 × ₹3,200 | ₹1.64 cr |
| OTA-sourced revenue | 60% share | ₹98.1 lakh |
| Commission @ 22% | ₹98.1 lakh × 22% | ₹21.6 lakh |
| GST on commission @ 18% | ₹21.6 lakh × 18% | ₹3.9 lakh |
| Total distribution cost | ≈ ₹25.5 lakh |
Twenty-five and a half lakh rupees. On most 20-room P&Ls that is the second-biggest line after payroll — bigger than electricity, bigger than linen, usually bigger than rent. And it scales with your success: fill more rooms, pay more commission.
What each lever is worth
Ten points of direct share ≈ ₹4.2 lakh
Move OTA share from 60% to 50% — repeat guests, wedding blocks, corporate accounts, the “send me the link” crowd — and roughly ₹4.2 lakh a year stops leaving. That needs a real booking engine on your own website, not an enquiry form. Ours charges 0% commission, on every plan. To put your own rate, occupancy and OTA share through the same arithmetic, use the OTA commission calculator.
Holding your website rate ₹300 lower ≈ free
Give back a third of the saved commission as a visible discount and comparers switch on their own. A channel manager that maintains the offset automatically turns this into policy instead of a chore.
Catching short payments
OTA settlement statements are long, monthly and occasionally wrong. Unless every payout is matched back to the bookings it covers, a short payment, an odd refund or a transfer that never arrived is simply invisible. The arithmetic makes the point on its own: on ₹98 lakh of OTA revenue, even 1% is close to ₹1 lakh a year. Our payout reconciliation does that match for you, booking by booking, so a gap surfaces as a line you can query.
Zero overbookings ≈ your rating
The most expensive commission is the apology suite you comp after a double-sell. Real-time sync doesn’t show up on the P&L until you remember what one overbooked wedding weekend costs.
The honest conclusion
You cannot quit OTAs and you shouldn’t — they find you strangers at a scale nothing else matches. But the gap between a hotel that manages its distribution cost and one that doesn’t is ₹5–8 lakh a year at this size. The software that closes the gap costs, on our published pricing, about ₹1.2 lakh a year for 20 rooms on the Scale plan — channel manager, booking engine and payout reconciliation all included, no add-ons. The math isn’t subtle — which is why we demo it on your numbers, not ours.