"I spend €1,000 a month on advertising and don't know if it's worth it. With Booking.com at least I only pay when they book." It's a common line of thought, and partly right: OTAs only charge on results. Advertising you pay for regardless.
But "is it worth it?" has a precise answer if you do the maths properly. In this article we look at how to compare advertising costs with OTA commissions, with a simple method and an example.
The key number: cost per booking
To compare different channels you need a common unit: how much it costs you to get a booking (or, better, how much it costs per €100 of revenue).
- OTA: commission + discounts + programmes on each booking. See how much an OTA booking really costs you.
- Advertising: total campaign spend ÷ bookings generated.
A worked example
One month of Google campaigns (brand + Hotel Ads) and Meta (remarketing):
| Item | Advertising | OTA (same bookings) |
|---|---|---|
| Spend / cost | €900 | – |
| Bookings | 24 | 24 |
| Gross revenue | €9,600 | €9,600 |
| Cost per booking | €37.50 | about €65–80 (15–18% commission + discounts) |
| Cost per €100 of revenue | €9.40 | €17–21 |
| Equivalent commission | 9.4% | 17–21% |
In this example advertising costs about 9% of the revenue it generates, versus 17–21% for OTAs. It pays off. If the advertising cost reached 20–25%, it wouldn't (barring other benefits).
Indicative figures: run the calculation with your real numbers.
Adjustments for an honest comparison
1. Remove cancellations
If 15% of campaign bookings are cancelled, real revenue is lower. Calculate on bookings that actually stay.
2. Add hidden direct costs
Booking engine, card fees, campaign management (your time or an agency).
3. Consider who would have come anyway
Some brand-campaign bookings would have reached your website anyway. Others, without the campaign, would have ended up on Booking.com. To estimate this, compare periods with and without the campaign.
4. Consider lifetime value
A guest who books direct may return direct (newsletter, relationship); an OTA guest often returns via the OTA. See direct bookings vs OTAs: how to compare net revenue.
When advertising costs more than OTAs
It happens when:
- you invest in very competitive generic searches;
- your website converts badly;
- your direct price isn't competitive;
- tracking is wrong and nobody knows what works;
- you spend during periods when the hotel would fill anyway.
In these cases, fix the website, pricing or strategy before increasing budget. See Google Ads brings clicks but no bookings: where to look for the problem.
A simple monthly check
Every month, for each campaign:
- spend;
- actual bookings (net of cancellations);
- revenue;
- percentage cost = spend ÷ revenue × 100;
- comparison with the OTA percentage cost.
If a campaign's percentage cost is consistently below the OTAs', consider increasing the budget. If it's above, fix it or cut it.
Frequently asked questions
Is ROAS enough to decide?
ROAS (revenue ÷ spend) is the flip side of percentage cost: a ROAS of 10 equals a 10% cost. It's a fine indicator, as long as revenue is real and correctly measured.
Should I compare with the base commission or the real OTA cost?
With the real cost, including discounts and programmes. Otherwise you underestimate what OTAs cost you.
If advertising costs the same as OTAs, is it still worth it?
Often yes, because it gives you a direct guest, their data (with consent) and the chance to bring them back commission-free.
Want to know if your advertising really pays off?
With our free marketing audit we calculate your campaigns' cost per booking and compare it with the OTAs', to see where to move your budget.
