7 minutes read

Breaking free from the OTA trap: when the brand is strong enough, customers come to you.

A 15 to 25% commission paid to booking platforms is effectively a penalty for a brand that isn't strong enough.

Sinh Vũ · Creative DirectorTourism sector

Quick summary

A strong travel brand helps accommodations build direct booking channels, reducing reliance on OTAs and saving 15 to 25% in commission per booking. The mechanism is not in the logo or beautiful design, but in consistent identity, authentic local storytelling, and an actual experience that matches the media image. When guests remember the name and trust the promise, they type the establishment's name directly into the search box instead of comparing prices on platforms.

In this article · 5 sections

Every time a guest books through Booking.com or Agoda, the owner pays 15 to 25% of the revenue to the platform. For a room priced at 2 million dong per night, that commission equals 300 to 500 thousand dong gone before the guest has even checked in. That fee is the price you pay when guests do not know your name well enough to find you on their own.

OTAs are not a distribution channel; OTAs are a penalty.

Booking platforms came into being to solve a real problem. Small accommodation providers do not have the budget to reach millions of potential guests, so the platforms do it for them and charge a fair fee. The logic makes sense, until dependence passes a threshold and profit no longer covers operating costs. When 70 to 80% of bookings come from OTAs, the owner is effectively working for the platform on their own property.

The deeper problem: the platforms own the guest data. They know who the guest is, how many times they have booked, what they like. The hotel owner only knows a name and a check-in date. Each time a guest leaves, the relationship disappears with them. The next time they book, on the same platform, the commission is the same as the first time. This is why many properties have operated for years with nothing lasting to show for it except room occupancy.

15 to 25%The common commission rates that OTAs charge accommodation providers in the Asian market, according to Mews Hotel Distribution Report 2024.

The brand operates as a private channel.

When guests remember a property's name, they do not need to go to a platform to find it again. They type the name straight into Google or Facebook, or message to ask directly. That behavior sounds simple. But behind it is a chain of understanding that the brand has to create first: what makes this property different, what the experience there is like, whether I should come back.

According to Marty Neumeier in The Brand Gap, a brand is what others perceive about a business, not what the business says about itself. A homestay claims to be "deeply local" but its furniture is all IKEA and breakfast is a sandwich. That property does not have a local brand, whatever its signage says.

Brands in the hospitality industry operate through four vectors described by Wally Olins: product (actual rooms and services), environment (space, scent, lighting), communication (photos, descriptions, social media), and behavior (how staff greet guests, how complaints are handled). All four must tell the same story. If communication conveys luxury but behavior in handling reviews is poor, guests will trust the behavior, not the communication.

Positioning is what you do in the minds of potential customers, not what you do with the product.

Al Ries and Jack Trout, Positioning: The Battle for Your Mind

Local storytelling: something that cannot be replicated.

OTAs can display room photos, prices and review scores. But a platform cannot create the feeling of "this place is for people like me". That is why properties with a genuine local story, told consistently at every point where guests encounter the brand, typically see higher rates of returning and referring guests than the industry average.

Local storytelling does not mean hanging a few folk paintings on the wall. It is a consistent set of design decisions: what the property's name evokes, which landscape the colors are drawn from. Where the breakfast ingredients come from and how that story is told, and how local staff are trained to talk about the place. When all of these elements are consistent, guests do not just book a room. They book a specific experience they cannot find anywhere else.

This is also why businesses with clear positioning can charge higher prices without competing on platforms. When customers compare prices, they see two businesses as equivalent. When they search for your specific name, the comparison no longer occurs.

92%Accommodation providers in Vietnam are expected to raise room rates in 2025, reflecting anticipated demand growth but also competitive pressure on brand quality. Source: domestic tourism survey, HotelJob Vietnam 2025.

Deciding touchpoints: images, reviews, and the gap between the two.

The most common complaint in 1 to 2 star reviews in the accommodation sector is not "dirty room" or "rude staff". The most common complaint is "not like the photos" or "not as described". That gap between expectation and reality is the biggest brand risk in this industry. It comes from communicating beyond what the property can actually deliver.

A strong brand is one where the real experience matches or exceeds the expectation that communication creates, not just photos that look better than reality. That requires honest decisions about who the property serves, what it promises, and what it refuses. A property aimed at "everyone" usually serves none of them well.

38%Customers are willing to pay more for a brand seen as “meaningful and different” than for an ordinary brand in the same segment. Source: Kantar BrandZ.

Building direct channels: not to replace OTAs, but to balance.

Completely withdrawing from OTAs is not a feasible strategy for most small and medium establishments, at least in the early stages of building identity. OTAs are still a channel for reaching new guests from markets that are not familiar with the establishment. A more realistic goal is to change the ratio: from 70 to 80% of bookings coming from platforms, moving towards 40 to 50% direct bookings over time.

A direct channel is not just a website with a "book now" button. A direct channel is the email list of guests who have stayed. It is also a social media page that tells enough of a story for guests to want to follow it long term, and a loyalty program for returning guests who book direct. Every satisfied guest who leaves with their email recorded is a potential booking with no commission next time.

Byron Sharp in How Brands Grow points out that brand growth comes from two factors: mental availability and physical availability. For accommodations, mental availability is why guests remember your name, while physical availability is why they can easily book directly. OTAs excel at the second part but cannot handle the first for you.

A note on transparency: figures on the share of direct bookings versus OTA vary widely by segment, geographic location and property size. The figures in this article are for illustrating orders of magnitude, not an industry standard that applies across the board. Your property needs to measure its actual rate from your own operating data before setting specific targets.

References

Mews, Hotel Distribution Report 2024. EHL Hospitality Insights, "OTA dependency and direct booking strategies". Skift Research, The State of Direct Booking 2023. Kantar BrandZ, different and meaningful brands. Marty Neumeier, The Brand Gap. Byron Sharp, How Brands Grow.

Frequently asked questions

Does building a brand really help reduce dependence on OTAs, or is it just a theory?

Brand affects booking behavior through a specific mechanism: when guests remember a property's name and have a clear impression of the experience awaiting them, they search for it directly instead of browsing a platform. Properties that invest in a consistent identity, authentic storytelling and direct email marketing typically see their direct booking rate grow gradually over time. This is a gradual process, not a result you get immediately after a single redesign.

For small establishments with limited budgets, where should they start to reduce dependence on OTAs?

The first priority is to make the real experience match the image you project. The gap between the two is what leads guests to leave negative reviews, not return and not recommend you to others. The second step is to build a simple channel you own, such as an email list of past guests, so you can reach them directly without an intermediary. Clear positioning from the start makes every marketing dollar that follows work harder.

Do homestays or small boutique hotels need to invest in a structured brand?

Being small does not make brand less important. If anything, it is the opposite. A large property can offset OTA costs with room occupancy, while a small one has no such room to maneuver. A homestay with clear positioning, convincing local storytelling and a consistent identity can price higher than competitors in the same class. That homestay also attracts the right guests, instead of competing on price on the platforms.