Direct booking for independent inns: the commission math and what the software must do

Online travel agencies bring guests you would never reach on your own, and most independent inns should stay on them. The question is how much of your business flows through them, and what each of those bookings costs. Good direct booking software for inns lets a guest who already found you book on your own website, at the same price, without a commission.

This post works through the commission math on an example inn, then lists what a booking engine has to do well. One disclosure up front: we make Stay, booking software for Vermont inns and B&Bs, so we have a stake in this. We have tried to keep the comparison fair, and the math applies whichever tool you choose.

What OTA commission actually costs

Booking.com does not publish a single commission rate. Instead, it depends on your location and property type, and each property sees its own rate in its partner account. Industry guides commonly describe a base rate around 15%, with more on top for visibility programs such as Preferred Partner. Guesty's guide to Booking.com fees gives a typical range of 10% to 25%. Expedia and Airbnb also have their own models.

Two details are easy to miss. First, commission is usually charged on the total reservation value, not only the nightly rate. Second, programs that promise more visibility usually raise the rate. So check your own statements for the real figure.

A worked example (hypothetical numbers)

The inn below is invented. Use your own figures in place of ours.

• 8 rooms
• An average rate of $220 a night
• 1,600 room nights a year booked through OTAs
• A 15% commission rate

OTA revenue: 1,600 × $220 = $352,000. Commission at 15%: $52,800 a year.

Now suppose a better direct booking path moves one in five of those stays to your own website. That is 320 room nights, or $70,400 of bookings.

• Commission no longer paid: 15% of $70,400 = $10,560.
• Card processing on those direct bookings: card fees still apply. At roughly 3%, that is about $2,112.
• Net difference before software costs: about $8,448 a year.

Finally, subtract what the booking software costs per year and you have the real gain. Notice the shape: the savings come from guests who already know your name. Many of them first found you on an OTA, then looked you up, and would have booked direct if it were easy.

Why guests book on the OTA instead of your site

Often the inn's own booking path makes it hard:

• The "Book now" button opens an email form, not live availability.
• The booking page looks nothing like the website and feels unsafe.
• It does not work well on a phone.
• The price looks higher because fees appear only at the end.
• It asks for an account before showing rooms.

Fixing these is most of the work. A cheaper rate on your own site can help, but check your OTA contracts for rate parity terms first.

What direct booking software for inns has to do

Whatever you choose, these are the requirements we would insist on.

Live availability, by room

Guests want to see which rooms are free on their dates, with photos. Many small inns sell rooms by name rather than by type, because each room is different. So the engine should support that if it matters to you.

Deposits and payments to your own account

Taking a deposit at booking reduces no-shows. Money should go to your own payment account, such as your own Stripe account, so you are not waiting on someone else's payout schedule.

Calendar sync with every OTA

This is the non-negotiable one. A booking on your site must close that room on Booking.com, Airbnb and Expedia, and the reverse, within minutes. Double bookings in peak season are the fastest way to lose a guest and a review. Most systems do this through a channel manager connection.

Seasons, minimum stays and taxes

Peak weekends, foliage, ski season and holiday minimums should be set once and applied automatically. In Vermont, every booking also carries the state rooms tax, and some towns add a local option tax. So the system should calculate it and give you monthly totals in the shape of the return.

Guest messages

Confirmations, a pre-arrival note and a receipt, sent automatically and in your voice.

Your data, exportable

Reservations, guest details and rates should export to a spreadsheet at any time. If you ever leave, your history leaves with you.

Comparing the options fairly

Established property management systems for small lodging, such as ThinkReservations, ResNexus, Cloudbeds and Little Hotelier, include booking engines and channel connections. They also have years of features and integrations behind them. For many inns, one of them is the right choice.

When you compare a full property management system with a simpler B&B booking system, ask each vendor:

1. Is there a fee per booking, or only a monthly fee?
2. Which channels does it sync with, and how fast?
3. Where do deposits land, and when?
4. Can I export everything, including future reservations?
5. Who helps me switch, and when is the safest time to do it?

Where Stay fits

Stay is our answer for Vermont's independent lodging. Guests book and pay a deposit on your own website, with no commission: a flat monthly fee, with deposits going to your own Stripe account. Card processing fees still apply, as they do for any card payment. Vermont seasons and town rooms tax come set up, and we move your reservations over in person, ideally in a quiet week with your OTA calendars connected. The first version is being built with a small group of founding partners. Details are on the Stay site.

If you are weighing a custom tool against these products, our build or buy checklist applies here too.

Run your own numbers

Pull last year's OTA statements and plug your room nights, average rate and commission into the example above. If you would like a second pair of eyes on the result, send us the figures. We reply within one business day.