The Break-Even Point of Direct Bookings
At what point does your PPC spend, loyalty discount, and booking engine fee exceed the 15% Booking.com commission?
The mantra "Direct is always better" has driven hoteliers to invest heavily in Pay-Per-Click (PPC) campaigns, SEO, and elaborate loyalty discounts. However, when the Cost Per Acquisition (CPA) of a direct booking exceeds the commission rate of an OTA, the strategy becomes detrimental to GOP.
The True Cost of Direct
A direct booking is rarely free. To compete with OTAs, hotels often offer a 10% "Book Direct" discount. Additionally, the booking engine provider charges a transaction fee (typically 2-4%), and the marketing spend (Google Ads, Meta) must be amortized across the generated bookings. If a hotel spends $15 on PPC to acquire a booking, gives a 10% discount on a $200 rate ($20), and pays a 2% booking engine fee ($3.60), the total acquisition cost is $38.60 (19.3%).
The Break-Even Analysis
If the OTA commission is a flat 15% ($30), the direct booking in the scenario above is actually *less* profitable than simply letting the reservation flow through Booking.com.
Modeling the ROI
Use our Direct Booking ROI calculator to determine your exact break-even point. By inputting your PPC spend, loyalty discounts, and booking engine fees, you can objectively compare the net revenue of a direct booking against an OTA reservation.