Direct vs OTA Is the Wrong Fight

Sit through enough tourism conferences and you'll see the same session on every agenda. Direct bookings versus OTAs. A panel, a few war stories about commission rates, a round of applause for whoever says they've "gone direct." Everyone nods. Nothing changes. Next year, the same session.

It's the wrong fight. And it costs operators more than the commissions they're complaining about.

Start with the thing nobody on the panel says out loud: direct isn't cheap. It only looks cheap because the cost is hidden. An OTA commission is a single, visible, variable number - you see it on every booking, it stings, and you only pay it when a sale actually happens. Direct is the opposite: the cost is spread out, mostly fixed, and never lands against any single booking. So it feels free. It isn't.

Put rough numbers on it. Hold one quarter's direct spend at $30,000 - and be honest about what's actually in that figure. It isn't just paid search and social. It's brochure printing and distribution, the booking platform, and a share of the salaries of the sales and reservations staff who answer the phone and turn an enquiry into a sale. All of it is the cost of going direct. Most of it is fixed, and you pay it whether the phone rings or not.

Now set that against the OTA, where the cost is a clean commission - say 20% - paid only when a seat actually sells.

At a $2,000 seat, the OTA takes $400 a booking. For your $30,000 of direct spend to beat that, it has to produce more than 75 direct bookings in the quarter ($30,000 ÷ $400). Above 75, direct wins. Below it, the OTA was the cheaper channel - you just couldn't see it on any single booking.

Now drop the seat to $200. The OTA's commission falls with the price: 20% is just $40 a booking. Your $30,000 of direct spend hasn't moved - the brochures still cost what they cost, the reservations team still gets paid. So now you need 750 direct bookings to break even against the OTA ($30,000 ÷ $40). Ten times the volume, for the same spend, to beat a commission you'd been calling expensive.

That's the part the "go direct" crowd never reckons with: the cheaper your product, the more the maths favours the OTA, because the commission you resent shrinks with the price while your direct cost base doesn't. Resenting a $40 commission while running a $30,000 quarter to avoid it isn't a strategy. It's a feeling.

The operator who knows their blended cost of acquisition - every channel's spend divided by every channel's bookings - stops asking which channel is cheaper and starts asking a better question: which channels give me reach I can't build on my own?

Because that's what an OTA actually is. It's a storefront on the busiest travel high street in the world, in a marketplace where you don't have a shop and couldn't afford to build one. The commission is rent on that footfall, paid only when it works. Framing it as leakage from your "real" direct business gets the relationship exactly backwards.

The resistance usually isn't really about money. It's about the relationship. Operators want the customer to be choosing them - the brand, the story, the thing they've poured a decade into. Here's the uncomfortable, freeing truth: no one cares about your brand as much as you do. At the point of booking, the customer cares about the trip, the dates, the price, and the reviews. That's not cynicism. It's permission to stop treating every OTA booking as a lost relationship and start treating it as what it is - a filled seat you didn't have to chase.

And filling the seat is the whole game, because of something most of this debate ignores: operators and OTAs are running different economic engines.

An operator's engine runs on fill. An empty seat on a departure is gone the moment the bus leaves - there's no second chance to sell it, and the marginal cost of putting a body in it is close to zero. So a seat filled at OTA economics is almost always better than a seat not filled at all.

The OTA's engine runs on lifetime value. It doesn't care about your Tuesday departure. It cares about owning a customer it can re-sell holidays to for the next ten years. You're optimising for fill; it's optimising for LTV. Those two goals don't compete - they fit together. You get the seat filled. It gets the customer relationship. The expensive mistake is wanting both the fill and the lifelong customer while being willing to pay for neither.

Price correctly, know your blended number, and OTA commission stops looking like a cost. It starts looking like what it is: marketing capacity you didn't have to build, reaching customers in the places they're already shopping.

But here's where the conference panel really fails you. It frames the whole question as two options, when direct and OTA are only two roads on a much larger map. Trade and wholesale. Agent relationships. Partnerships that put you in front of an audience you can't reach alone. Your own repeat and referral engine, which is the cheapest channel you'll ever own and the one most operators neglect entirely.

The right question was never direct or OTA. It's: what does it cost me to acquire a customer across every channel I run, and which of those channels reach people I couldn't reach by myself?

Both. And more.