Tourist lodging: what a direct booking is really worth

A platform commission, the percentage a booking site takes on every stay it sells, is not an operating expense: it is a customer acquisition cost, the total amount spent to win a new booking. Compared with what it would cost you to win the same booking directly, it gives a precise threshold beyond which investing in your own channel pays more.

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The indicator that should drive your decisions

We are writing here for owners and managers of lodging establishments: hotels, inns, tourist residences, rental chalets. It is about the trade-off between channels, not about rate management.

Two indicators circulate in the industry and neither is enough on its own. Occupancy rate ignores price: a full house at a discount looks excellent. Average rate ignores occupancy: a high rate on three rented units looks excellent too.

Revenue per available unit settles the problem. The government defines it as gross revenue divided by the number of available units. It combines the two dimensions, and it is the only one that answers the question that matters: is what I am doing increasing what I earn?

For a marketing trade-off, that is the number to track. A campaign that fills rooms at a discount pushes occupancy up and revenue per unit down. A business that judges on occupancy alone will fund exactly the wrong kind of booking.

Your competition has a new definition

It is an official and recent change that few operators have absorbed.

The Ministère du Tourisme, Quebec's tourism department, now publishes a dashboard that groups, by regional county municipality (MRC), the data of commercial lodging with four or more units and that of short-term rentals listed on the platforms.

The government itself therefore measures the two pools as a single market. A Laurentians inn no longer competes only with other inns; it competes with the supply of chalets and apartments on its territory, and that supply is now counted.

Your marketing has to draw the consequence: travellers now compare options you did not consider comparable, on the same platforms and often in the same search. Your differentiation can therefore no longer rest on your establishment category; it has to rest on what you offer that the other does not.

What a platform booking really costs

The commission is the visible line. Three others add to it and appear nowhere.

The commission itself, taken on the amount of the stay, taxes excluded depending on the agreements.

Pressure on price. A platform puts your offer next to dozens of others, which pushes the rate downward. That gap never shows up as a cost; it shows up as a market price.

The lost relationship. You hold neither the guest's email nor their history. Bringing them back will go through the same platform, so a second commission on a guest you had already served.

The cost of dependence. An establishment that gets most of its bookings from a single channel has no leverage when that channel's terms change.

These four line items do not make the platform bad. They make it expensive, which is different, and which finally lets you compare it to something else.

Calculating your break-even threshold

Three lines, with your own numbers.

A stay represents $451, of which $77 is commission. That is your gross threshold: as long as you win a direct booking for less than $77 of acquisition, you come out ahead.

Then adjust for two realities. A share of your direct bookings would have come anyway, which reduces the real gain. And a direct guest whose email you hold sometimes comes back at no cost, which increases it. On a prudent assumption, the practical threshold sits around $31 per booking.

That number changes everything, because it turns a question of principle, should we invest in direct, into a verifiable trade-off: is your cost per direct booking above or below $31?

The guest data slips away

It is the most lasting consequence and the least quantified.

A direct booking leaves you an email, a stay history, preferences. A platform booking leaves you one occupied night.

The difference shows on the return visit. A guest whose email you hold can be invited back in the off-season at a cost close to zero. A platform guest has to be bought back, at full commission, as if they did not know you.

This logic joins that of the list as an asset, covered in our article on subscriber value. In lodging it is even more clear-cut: your list is the only way to fill a slow week without paying twice.

One important legal point. An address obtained during a booking was obtained to deliver the stay. Using it for promotion is a different purpose, which requires separate consent. Plan a clear sign-up box at booking time, never an extraction of the guest file.

The off-season is the real terrain

In high season, the platform brings you bookings you might have won anyway. It then takes a commission on volume that already existed.

In the off-season, the situation reverses. Volume is scarce, competition on the platforms is sharper, and the commission lands on nights you struggle to sell. That is exactly when each commission dollar hurts the most.

So that is where direct booking pays the most, and where your list and your local presence take on their full value. An offer sent to your past guests for a November week costs a few hours and no commission.

The logic of spending against the calendar is covered in our article on counter-season acquisition. In lodging it comes with an advantage of its own: the revenue per available unit of a slow week filled directly is far higher than that of the same week filled through a platform.

The rules on all-inclusive price display are detailed in all-inclusive price display.

This point sits inside the plan described in splitting the budget across channels.

Frequently asked questions about direct booking