I spent years running digital for luxury hospitality brands, Peninsula among them, and one argument arrived on schedule every budget season. Paid search for our own destination terms was too expensive. The clicks cost real money and the bookings would surely have come anyway. Meanwhile, the same P&L was paying an online travel agency fifteen to twenty-five percent of every room night it delivered, and nobody called that media, so nobody put it on the media plan.
Put the two side by side and the refusal collapses. A $2,000 booking through an OTA channel costs $300 to $500 in commission. The paid click that produces the same booking directly rarely costs a tenth of that, and it comes with the guest's email address, their preferences, and the beginning of a relationship the OTA will otherwise own forever. Run it across a year: a property doing $10 million in OTA-mediated revenue at twenty percent commission is spending $2 million on distribution. Its entire direct media budget is usually a fraction of that number, and the fraction is the line item that gets scrutinized. The commission is the most expensive click in hospitality. It just hides inside a distribution line instead of an advertising line, and the org chart makes sure the two are never compared, because distribution reports to revenue management and media reports to marketing and the only person positioned to see both numbers on one page is the CFO, who has been told the commission is the cost of doing business.
The one-page test
Here is the exercise I ran with hotel clients, and it works in any category with a marketplace middleman: put every dollar spent acquiring a customer on a single page, regardless of which department pays it. Media, OTA commission, metasearch fees, loyalty discounts, the wholesale margin on packaged rates. Then compute cost per acquired guest by channel, honestly. Every time I have run this, the channel the organization was rationing, direct paid search and metasearch, turned out to be the cheapest acquisition on the page, and the channel nobody questioned was the most expensive. The refusal to buy your own demand was never frugality. It was a bookkeeping illusion with a seven-figure price tag.
The strategic problem is that OTAs are also genuinely useful, and pretending otherwise leads to the opposite mistake. They are the discovery layer for guests who have chosen a city but not a hotel, they carry markets your brand has no presence in, and abandoning them is not the play. The play is segmentation: let the marketplaces do what only they do, introduce you, and fight for every guest who already knows your name. Those are two different populations, and the tragedy of most hotel media plans is paying marketplace prices for the second group.
That means owning your brand terms without apology, tested, not assumed, because OTAs bid on your hotel's name with your own commission money, an arrangement so circular it would be funny if it were not on your P&L. It means metasearch presence run as performance media, since that is the last shelf where you and the OTA appear side by side at the moment of choice. It means a booking engine that does not embarrass the brand, because winning the click and losing the checkout is the most expensive way to prove a point. And it means a reason to book direct that is real: rate parity clauses constrain the price lever, but upgrades, flexibility, late checkout, and recognition are yours to give, cost you a fraction of the commission they displace, and are precisely the things a marketplace cannot offer.
Why luxury has the most to gain
Luxury properties feel this trade most sharply, because their guest notices everything, including who seems to know them. The OTA relationship is transactional by design; the marketplace's loyalty program competes with yours, its emails compete with yours, and the guest it delivers arrives as a stranger every single stay. A guest acquired direct arrives with a history: the room preference, the anniversary, the allergy the kitchen remembered. That knowledge is the product at the luxury tier, and it only accrues in channels you own. Every commission check is also a decision to keep the guest anonymous.
The channel your finance team calls too expensive and the channel it calls the cost of doing business are usually the same channel wearing two names. Put them on one page. The page will tell you what to buy.