Platforms like Booking and Expedia are useful: they bring you guests who otherwise wouldn't find you. But they're also expensive, far more than most hoteliers in Cabo stop to calculate. Every booking through an OTA can cost you between 15% and 25% of the night in commission. For a hotel with good occupancy, that adds up to a fortune a year coming straight out of your margin.
The problem isn't using OTAs. The problem is depending on them for bookings you could be capturing directly, commission-free. Let's look at how to balance the scale.
What an OTA really costs you
Imagine a boutique hotel in Cabo with a decent average rate and healthy occupancy. If a significant share of those bookings comes through Booking or Expedia, and 18% or 20% of each leaves in commission, the annual tally is chilling. It's like having an invisible partner taking a cut of every night, without putting a dollar into your hotel.
And there's an additional hidden cost: the guest who booked through Booking is Booking's guest, not yours. You don't have their email, you can't easily build loyalty, and next time they'll probably search Booking again instead of booking directly with you. OTAs don't just charge commission: they keep the relationship with your client.
Why guests book through OTAs even when they'd prefer direct
Many people would book direct if they could, but end up on Booking for two reasons: either they didn't find your hotel directly on Google, or your site didn't give them confidence or an easy booking process. OTAs win because they're visible and because booking on them is simple. If your hotel matches those two things —visibility and ease— you recover the direct booking.
The Cabo traveler has no loyalty to Booking; they have loyalty to what's easy and trustworthy. Give them an easy, trustworthy way to book directly with you, and many will, especially if you give them a reason (better rate, an extra, personal attention).
The strategy to win the direct booking
- Appear on Google by your name and category: many guests search you directly after seeing you on an OTA. If you don't appear, they go back to the OTA.
- Have a site with your own booking engine, fast and simple, working perfectly on mobile.
- Offer a clear incentive for booking direct: better rate, upgrade, late checkout. Even discounting that, you earn more than paying commission.
- Capture your guests' emails and build relationships: the direct guest is yours forever.
- Work your Google reviews: the trust they provide lets the guest dare to book outside the OTA.
OTAs as an ally, not an owner
The smart strategy isn't to eliminate OTAs —they're still a valuable showcase— but to use them as what they should be: one more source, not the only one. Being discovered on Booking is fine; having every subsequent booking from that guest also go through Booking is not. The goal is for OTAs to bring you new guests while your own digital presence converts and retains the rest.
A hotel in Cabo that balances its channel mix —reducing OTA dependence and raising its direct booking percentage— improves its margin on every night, without raising rates or lowering quality. It's one of the highest-impact profitability decisions a hotelier can make, and it almost always starts with a better digital presence.
We help hotels in Cabo increase direct bookings and reduce OTA dependence. See our hotel marketing strategy.