Two properties report 500k EUR of room revenue. One keeps 470k EUR, the other 410k EUR. Same top line, a very different business. The difference sits between the price the guest pays and the money that actually lands in your account.
Gross vs Net, in Plain Words
Gross revenue is what the guest paid for the room. Net revenue is what is left after the cost of selling that room: OTA commission, payment fees, the booking engine and other distribution costs. VAT and city tax are not yours either, so we leave them out of both.
The example is simple, but the pattern is real. A booking on your own website keeps almost all of the money. An OTA booking costs 15 to 25% in commission, and more when a discount programme sits on top.
Why the Gap Is Bigger Than It Looks
Across the properties we manage, Booking.com commission alone ranges from 15% to 23%, depending on the contract and the programmes switched on. On one small resort, a few points of commission were worth around 4k EUR a year. And the costs like to hide in the details:
- Commission on extras. One hotel found out it was paying commission on breakfast as well as on the room.
- Net and gross channels mixed together. Some channels pay you a rate with the commission already taken off; others invoice it later. If a report mixes both without saying so, any comparison between channels is wrong.
- Discount programmes. A 10% programme discount plus 18% commission does not cost you 28%. It costs 26.2% of the original price, and it also goes to guests who would have booked anyway.
So Should Everyone Book Direct?
Not quite. OTAs bring guests you would never reach on your own, and for many properties they remain the backbone of the business. The goal is not zero OTA bookings. It is the right mix:
- Make your own website the best place to book: a fair rate, a small perk, a simple booking engine
- Get your direct rate onto Google with free booking links
- Keep OTA programmes where they bring new guests, and switch them off where they only discount guests who would have come anyway
- Report revenue net of commission, per channel, every month
Compare channels on net revenue and the decisions get much easier. A 110 EUR OTA booking at 20% commission leaves you 88 EUR. A 95 EUR booking on your website leaves you about 92 EUR.
What We Put in Our Reports
In our owner reports we show room revenue without VAT, the commission paid per channel per month and commission as a share of revenue. It takes five minutes to read, and it shows straight away where the money leaks.
Want to know what your channel mix really costs? Book a free Performance Assessment Call.