What Booking.com’s commission really costs
The percentage is small. The year is not. A worked example for a villa with eight rooms, and the part of the bill that is paid on guests who were always going to find you.
· 3 min read · Northlight
Booking.com’s commission for most properties starts at about 15 percent of the booking. Many end up paying more than that, because the programmes that move a listing up the results, and the ones that put a discount badge on it, each add to the rate. In practice a property in Sri Lanka pays somewhere between 15 and 18 percent, and the exact figure is in your extranet, under your contract.
On one booking that is an amount nobody argues about. Over a year it is often the largest single cost a small property has after its staff.
A year, worked through
Take a villa with 8 rooms on the south coast, charging $120 a night and 65 percent full across the year. That is about 1,898 room nights and $228,000 of room revenue.
Say 70 percent of those nights arrive through Booking.com, Agoda and Airbnb, which is ordinary for a property without a website that can take a booking. At 16 percent, the agents’ share of that year is about $25,500, or roughly LKR 7,700,000 at 302 rupees to the dollar.
Nothing about that number is unusual. It is simply what a commission rate looks like when it is multiplied by a whole season instead of a single stay.
Which part of it buys you anything
Not all of that money is wasted. An agent does find guests a property would never have reached: someone in Berlin searching “Ahangama, three nights, pool” was not going to find you any other way, and the commission on that booking is a fair price for the introduction.
But a large share of every year’s bookings comes from guests who already knew your name. They saw you on Instagram, a friend stayed last year, they came back for a second visit, or they searched for you on Google and clicked the first link that would take a booking, which was an agent’s. Each of those guests still pays the agent’s cut, because there was no other way to book you.
Researchers who studied hotel listings found that being on the booking sites also sends guests to a hotel’s own website: they see the property on the agent’s page and then look for it directly. It is often called the billboard effect, and it only pays off if there is something to find when they look.
The modest version of the arithmetic
You do not need to move most of your bookings to make a direct website worthwhile. Move one booking in ten from the agents to your own site, and in the example above you keep about LKR 770,000 a year that is currently paid away.
For a very small property the honest answer can be that a website would not pay for itself yet, and better photographs and a stronger Google listing are the first step. Our commission calculator works this out from your own rooms, rate and occupancy, and it says so plainly when the answer is no.
What to do with the number
Find your real commission rate in the extranet, and the share of last year’s bookings that came through each agent. Multiply them out for the year. Then ask a simple question of the guests behind that figure: how many of them already knew who you were?
That second number is the one a direct booking website is built to win back.
