OTA vs Direct Bookings: What’s the Right Distribution Mix for Hotels in India?
OTA vs Direct Bookings: What’s the Right Distribution Mix for Hotels in India?
For most hotels in India, the OTA vs direct bookings debate is misunderstood. Owners are told to “go all direct” or aggressively cut OTAs—but in reality, that approach is impractical and often damaging. The real question is not OTAs or direct bookings.
The real question is: what distribution mix maximizes net revenue for your hotel in the Indian market?
1. Why OTAs Dominate Hotel Bookings in India
India is a price-sensitive, discovery-driven market. OTAs play a critical role, especially for:
- Tier 2 and Tier 3 cities
- Leisure-driven destinations
- Boutique and independent hotels without strong brand recall
OTAs invest heavily in:
- Meta search visibility
- App-based loyalty programs
- Discount-led acquisition
Ignoring OTAs in India is not a strategy - it’s a visibility risk.
2. The Real Cost of OTA Dependency
While OTAs drive volume, excessive dependence erodes profitability.
Typical OTA commission in India:
- 15% - 25%, excluding discounting and promos
Hidden costs include:
- Forced price parity
- Reduced pricing flexibility
- Loss of guest ownership
- Margin compression during peak demand
- Hotels with 70%+ OTA contribution often look busy but struggle with cash flow and profitability.
3. Why “100% Direct Bookings” Is Unrealistic for Most Indian Hotels
Direct bookings are valuable - but pushing them blindly creates problems.
Challenges include:
- High digital marketing costs
- Limited conversion on hotel websites
- Low repeat guest base in leisure markets
- Price competition with OTAs
- For most independent hotels in India, direct bookings stabilize revenue—but cannot replace OTAs entirely.
4. What an Ideal Hotel Distribution Strategy Looks Like in India
A smart hotel distribution strategy in India balances visibility and profitability.
A healthy benchmark:
- 45–60% OTA contribution
- 25–40% direct bookings
- Remaining via corporate, walk-ins, or long stays
The focus is not channel percentage - it’s net realization per booking.
5. How to Reduce OTA Dependency Without Killing Demand
Reducing OTA dependency does not mean removing OTAs. It means controlling how and when they are used.
Key levers:
- Channel-level pricing control
- Selective OTA promotions (not blanket discounts)
- Higher pricing during peak demand on OTAs
- Direct-only value adds instead of discounts
- Inventory protection for high-demand dates
This approach improves margins without sacrificing occupancy.
6. Pricing Discipline Is the Backbone of Distribution Control
Most distribution problems are actually pricing problems.
Hotels lose control when:
- OTAs are cheaper than direct
- Panic discounting starts during low pickup
- Parity violations are unmanaged
Strong pricing discipline ensures OTAs remain demand fillers, not revenue drivers.
7. How RevX Designs Distribution Mixes for Indian Hotels
RevX Hospitality builds distribution strategies specifically for the Indian market.
Our approach includes:
- Channel-wise net revenue analysis
- Market-specific OTA participation
- Demand-based channel activation
- Pricing parity audits
- Weekly distribution performance reviews
