A direct booking is not automatically free, and an OTA booking is not automatically unprofitable. A useful comparison includes the channel’s actual fees, marketing costs, software allocation and the effect of cancellations. Use the same revenue basis and reporting period for both channels, then compare contribution rather than headline commission alone.
Choose a consistent revenue basis
Start with realised room revenue for completed stays, using the same treatment of taxes, refunds and extras in both columns. Keep gross bookings and completed bookings separate. If a channel reports tax-inclusive booking value while another report excludes tax, reconcile the difference before comparing percentages. Ask the person responsible for your accounts to confirm the reporting basis.
- Use one period and currency.
- Define whether revenue includes extras.
- Exclude cancelled revenue that was fully refunded; retain any relevant costs.
Include channel-specific and shared costs
For an OTA, use the actual contracted commission and any other channel fees. For direct bookings, include attributable advertising, payment costs and booking software charges. Decide how to allocate shared costs, and show that rule beside the calculation. Per-booking costs should use the relevant completed-booking count, not clicks or enquiries.
- Record payment fees from statements rather than assumed rates.
- Include retained fees or processing costs on refunded bookings where applicable.
- Separate incremental campaign spend from a broader brand budget.
Calculate contribution and acquisition cost
Channel contribution equals the comparable realised revenue minus the costs you included for that channel. Channel cost per completed booking equals included channel costs divided by completed bookings. These are management-analysis measures, not a replacement for statutory accounts. When volume is small, inspect individual stays as well as the average: a group reservation and a one-night booking can produce very different costs.
- Keep each input visible in the worksheet.
- Show both currency amounts and percentages.
- Avoid assigning unsupported savings to a software purchase.
Use the result to guide a test
If direct acquisition costs are high, investigate the campaign, landing page and booking journey before increasing spend. If an OTA delivers profitable new demand, assess its contribution rather than treating commission as the only outcome. Review cancellation patterns and room-night mix. Change one identifiable part of your acquisition approach, record the date and compare an appropriate subsequent period.
- Use your own fees and margins.
- Compare completed stays and qualified demand.
- Keep hotel software pricing questions separate from channel economics.
Practical worksheet
Download editable worksheet (CSV) ↓
Open the CSV in Excel, Google Sheets or another spreadsheet editor. Use fictional sample rows as examples and review the template before operational use.
Original editable planning resource. Examples are fictional; adapt and review before operational use.
| Channel | Realised room revenue | Completed bookings | Commission / channel fees | Payment fees | Attributable marketing | Allocated software / other costs | Included costs | Contribution | Cost per completed booking |
|---|---|---|---|---|---|---|---|---|---|
| Direct – hypothetical | 100000 | 20 | 0 | 2000 | 6000 | 2000 | 10000 | 90000 | 500 |
| OTA – hypothetical | 100000 | 20 | 15000 | 0 | 0 | 0 | 15000 | 85000 | 750 |
Hypothetical arithmetic only: direct revenue of ₹100,000 minus ₹10,000 included costs leaves ₹90,000 contribution. Dividing those costs by 20 completed bookings gives ₹500 per booking. The OTA column assumes ₹15,000 included costs, giving ₹85,000 contribution and ₹750 per booking. These values are not market fee benchmarks, PowerOTA prices or a forecast for your hotel.
Put the guide into practice
Replace every hypothetical input with your own statements and approved cost allocations. Compare the booking journey and commercial terms in a product demonstration without assuming that direct reservations have zero acquisition cost.
Explore hotel booking engine, read the related practical guide, or book a demonstration to verify the workflows for your property.