How to price direct against the OTA rate

Once a property has its own booking website, the first question is almost always the same: should it be cheaper there? The commission saved on a direct booking is real money, and passing some of it to the guest seems the natural way to win them.

It is worth slowing down before doing it.

What your contract may say

Many booking site contracts include a rate parity clause. In its common form it says the price you show the public on your own website must not be lower than the price you give that booking site for the same room on the same dates. The details differ between sites and between countries, and they change, so the only reliable answer is in your own agreement and your extranet’s terms.

If your contract has such a clause, advertising a lower price on your own website can breach it. Booking sites watch for this, and the usual consequence is a warning, a lower position in the results, or worse. That is a lot to risk for a few percent.

Why a lower price is not the strongest argument anyway

A guest comparing prices across three tabs will book wherever is cheapest that minute, and they will compare again next time. A guest who books direct because the stay is better there is a guest who comes back. Price is the one advantage the booking sites can always match. What they cannot match is what only you can offer.

Three ways to make direct the better deal

1. Same price, more included. Keep the room rate the same everywhere, and give the guest who books direct something the booking sites cannot: dinner on the first night, the airport car on longer stays, a late checkout, the surf lesson or the cooking class. It costs you less than the commission it saves, and it is the kind of thing a guest tells their friends about. Our demo properties each do one of these: Kithul Cove includes the airport car on longer stays, and Ralla includes dinner on the first night.

2. Better terms, not a lower price. Flexibility is worth money to a guest. A more generous cancellation window, paying the balance on arrival, or no booking fee are all reasons to book with you that do not change the price on the page.

3. A rate for the people who already know you. Returning guests, and guests sent by a past guest, can be offered a private rate in a message rather than a public price on the website. Check how your contract treats rates that are not shown to the public; this is exactly the kind of detail that differs between agreements.

How to decide

Start from what you keep. If a booking through an agent costs you 16 percent, a direct booking is worth that much more to you before you offer anything. Decide how much of that you are willing to give back, and give it back as something the guest values more than it costs you.

Then make sure every guest who already knows your name can find the direct way to book: the link on your Google listing, in your WhatsApp profile and in every confirmation. A direct offer nobody sees saves no commission at all.

If you want to see how much is at stake, the commission calculator works it out from your own numbers.