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OTA and direct bookings

How to Reduce OTA Commission for Your Hotel in India (A Realistic Plan)

OTAs are expensive, and most owners know it. The trouble is that the usual advice (“just get more direct bookings”) skips the hard part: which bookings can realistically move, and how.

This guide is the realistic version. Keep the OTAs that bring you new guests. Win back the bookings you’re already paying for twice.

How much commission do OTAs charge hotels in India?

Most independent hotels in India pay OTAs typically 15 to 25% of the booking value, depending on the OTA and the contract. There’s no public, standard rate card. Rates are negotiated, and they vary by location, type of property and any promotions you join.

The best public record of what hotels actually pay comes from the Competition Commission of India. In a 2019 order, the CCI recorded that the hotel federation FHRAI alleged standalone hotels were paying MakeMyTrip-Goibibo around 22 to 40%, compared with what FHRAI called a standard 15% at Booking.com and Yatra. MakeMyTrip-Goibibo told the CCI it charged most of its hotel partners less than 25%.[1] These are the two sides’ claims, not findings, but they show how wide the range can be.

Then there’s GST. The OTA charges 18% GST on its commission, as a support service.[3][4] Whether that GST is a cost depends on your room rate:

  • Rooms above ₹7,500 a night pay 18% GST with input tax credit, so you can usually claim the GST on commission back.
  • Rooms at ₹7,500 or less pay 5% GST without input tax credit, so the GST on commission stays a cost.[5]

For a hotel in the second group, a 20% commission really costs 23.6%.

Commission in your contract What it really costs at ₹7,500 or less On a ₹6,000 night
15% 17.7% ₹1,062
20% 23.6% ₹1,416
25% 29.5% ₹1,770

The full GST picture, including restaurants and how the ₹7,500 test works, is in our guide to GST on hotel rooms and OTA commission.

Why do guests book on OTAs even when they found you elsewhere?

Because the OTA is usually the easiest place to finish the booking. A traveller might hear about you from a friend, see you on Instagram or get your name from an AI tool. Then they open the app they already use to actually book.

The app has their card saved. It shows reviews, a clear cancellation policy and a price in one place. Your own website, too often, is slow on a phone, has no live availability, no UPI, or a form that says “we’ll get back to you”. So they go back to the OTA and you pay commission on a guest you had already won.

None of this makes OTAs the enemy. They market to travellers at a scale no single hotel can match, they bring guests who would never find you alone, and first-time guests trust them. The goal is a healthier mix, not a fight.

What is a realistic target for direct bookings?

A realistic target is a modest, measurable share of your current OTA bookings moving to your own website, starting with guests who already know you. The point of a target is to measure progress, not to promise a number.

Here’s an example with simple numbers. Take a 20-room hotel at ₹6,000 a night, 60% occupancy, open all year, with 70% of bookings from OTAs at 20% commission. Because the rate is below ₹7,500, the GST on commission counts as a cost. We assume each direct booking costs 3% (the ~2% payment gateway fee[6] plus a little promotion).

That hotel pays about ₹43.4 lakh a year in OTA commission. If a share of those OTA bookings moves to its own website:

Share of OTA bookings moved to direct Extra the hotel keeps per year Direct share of bookings
10% ₹3.79 lakh 30% → 37%
15% ₹5.68 lakh 30% → 40.5%
20% ₹7.58 lakh 30% → 44%

Example only, using the same maths as our OTA commission calculator. Notice that even the 20% scenario leaves most bookings with the OTAs. That’s the realistic picture: a meaningful saving without walking away from your biggest source of new guests.

How can a hotel reduce OTA commission? Seven levers, cheapest first

Start with the levers that cost least and work on bookings you’re already close to winning.

1. Reply on WhatsApp within minutes

A guest who messages you and waits an hour often books somewhere else in the meantime. Fast replies with a clear price and a way to pay are the cheapest direct bookings you’ll ever get. Effort: low.

2. Make booking on your website as easy as on an OTA

One screen, live prices, UPI first, no account to create, and fast on a phone. If your site can’t take a booking in under a minute, guests will finish on the app. Our guide to choosing a hotel booking engine has a checklist, and why hotel websites get visitors but no bookings covers the common leaks. Our Direct Booking Optimization service works on exactly this, with the booking engine you already use. Effort: medium, once.

3. Give a reason to book direct that doesn’t touch your rate

Breakfast included, a guaranteed late checkout, an upgrade when available, or more flexible cancellation. Perks like these give guests a reason to book with you without changing your price on any channel. Read our explainer on rate parity in India before you offer a lower rate on your own site. Effort: low.

Guests who stayed once and loved it are the easiest bookings to move. Ask at checkout whether they’d like to hear about offers, record that consent, and keep it separate from booking messages. Then send a simple return offer before their usual travel season. Effort: low to medium.

5. Make sure people who search your name land on your site

When someone searches your hotel’s name, your own website and your Google listing should come up with a clear way to book. Check that your Google listing links to your website, and that your name, address and phone number match everywhere. Effort: low.

Some travellers now start by asking an AI tool for a shortlist. If your details are patchy online, the AI names someone else. Our guide to AEO for hotels explains how AI tools choose which hotels to mention. Effort: medium, ongoing.

7. Use OTAs deliberately

Look at which OTA brings which guests and at what real cost, every month. Keep OTAs for what they do well, like reaching new markets and filling quiet periods, and use those numbers when you renegotiate. Effort: ongoing.

Lever Effort What it changes
Fast WhatsApp replies Low More enquiries become direct bookings
Easy website booking Medium, once Fewer guests leave your site for an OTA
Book-direct perks Low A reason to choose your site
Past-guest offers Low to medium Repeat stays come direct
Correct search listings Low Name searches land on your site
AI search visibility Medium, ongoing You make more shortlists
Deliberate OTA use Ongoing Lower real cost per OTA booking

What should you avoid when cutting OTA commission?

Avoid anything that breaks a contract or damages trust. A few mistakes cost more than the commission they save:

  • Changing direct prices without reading your OTA contract. In 2022, the CCI directed MakeMyTrip-Goibibo to remove price and room parity clauses with respect to other OTAs.[2] That doesn’t settle what every contract allows on your own website, so check yours first.
  • Fake discounts. Crossed-out “was” prices that were never charged mislead guests, and they damage trust once someone notices.
  • Pulling off OTAs overnight. You lose reach before direct demand exists to replace it.
  • Pushing OTA guests to cancel and rebook. Check your contract before contacting OTA guests about rebooking; it can breach your agreement and puts guests in an awkward spot.
  • Spending on ads before your booking flow works. Paid traffic to a slow website just sends more people to the OTA.

How do you measure progress each month?

Track four numbers every month and compare them with the month you started:

  1. Direct share: direct room nights as a share of all room nights.
  2. Commission paid: including the GST you can’t claim back.
  3. Direct revenue: room revenue from your website, phone, WhatsApp and walk-ins.
  4. Cost per direct booking: gateway fees plus any promotion, divided by direct bookings.

If direct share is rising and commission paid is falling while occupancy holds, the plan is working. If occupancy drops, you’ve moved too fast. For more tactics, see how to increase direct bookings for a small hotel.

AI tools are changing where guests find hotels too. Our guide on whether AI will replace OTAs in India looks at what that means for your booking mix.

Key takeaways

  • OTA commission is typically 15 to 25% per booking, depending on the OTA and your contract, and the 18% GST on it is a real cost if your rooms sell for ₹7,500 a night or less.
  • Aim to move a measurable share of OTA bookings to your own website, starting with repeat guests and people who already know your hotel. Don't try to quit OTAs.
  • The cheapest levers come first: reply fast on WhatsApp, make your website as easy to book as an OTA, and give a book-direct reason that doesn't change your rate.
  • Read your OTA contract before changing prices on your own site, and never use fake discounts.
  • Track four numbers every month: direct share, commission paid, direct revenue and cost per direct booking.

Frequently asked questions

Can a small hotel survive without OTAs?

Some can, usually those with strong repeat business, a loyal corporate base or a well-known local name. Most independent hotels still need OTAs to reach travellers who have never heard of them. A healthier goal is a better mix: OTAs for discovery, your own website for guests who already know you.

Is 15 to 25% commission normal for hotels in India?

It's the typical range, but rates depend on the OTA, your contract, your location and any promotions you sign up for. In a 2019 case before the Competition Commission of India, the hotel federation FHRAI alleged standalone hotels were paying MakeMyTrip-Goibibo 22 to 40%, while MakeMyTrip-Goibibo said it charged most of its hotel partners less than 25%. Check the rate in your own contract.

Does GST apply on OTA commission?

Yes. OTAs charge 18% GST on their commission. If your rooms sell for more than ₹7,500 a night, you pay 18% GST on them with input tax credit, so you can usually claim that GST back. At ₹7,500 or less, rooms pay 5% GST without input tax credit, so the GST on commission becomes a cost.

How long does it take to see more direct bookings?

It depends on where you start. Fixing a slow website or slow WhatsApp replies can change how many enquiries convert within weeks, while building repeat business takes at least a season. Measure your direct share every month against your starting point so you can see what's working.

Sources

  1. Case No. 14 of 2019, order under Section 26(1), 28 October 2019 (FHRAI v. MakeMyTrip, Goibibo and OYO), Competition Commission of India. Accessed 3 October 2026.
  2. Press Release No. 51/2022-23: sanctions on MakeMyTrip, Goibibo and OYO, Competition Commission of India. Accessed 3 October 2026.
  3. Notification No. 11/2017-Central Tax (Rate), as amended (Heading 9985, support services), ICAI GST & Indirect Taxes Committee (consolidated text). Accessed 3 October 2026.
  4. Scheme of Classification of Services (SAC 998552, reservation services for accommodation), GST Council. Accessed 3 October 2026.
  5. Recommendations of the 56th meeting of the GST Council, GST Council / Press Information Bureau. Accessed 3 October 2026.
  6. Razorpay pricing, Razorpay. Accessed 3 October 2026.
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