Add every acquisition cost over a period — agency fees, ad spend, content, tools, and a fair share of the staff time — and divide by the direct bookings produced in the same period. Blended, not per channel. Then compare it against your effective commission rate, which is commission invoiced divided by platform revenue. If cost per direct booking is below effective commission, every booking you move direct is profit and spending more is rational. If it is above, stop buying traffic and fix conversion.
Every argument about direct bookings eventually reaches a number, and it is almost always the wrong one.
The wrong comparison
“Card processing is 3% and the platform takes 30%, so direct is ten times cheaper.”
That is true of the transaction and false of the business. Card processing is what it costs to collect a direct booking. It is not what it costs to get one. The platform’s 30% includes the entire cost of finding the traveller, convincing them, and carrying the trust that let them buy — work that still has to be paid for when you do it yourself.
The right comparison is your blended cost per direct booking against your effective commission rate. Both sides of that comparison are usually unknown, which is why the argument keeps going.
The calculation
Two numbers, one period, no estimates.
| Number | How | Common error |
|---|---|---|
| Cost per direct booking | All acquisition spend ÷ direct bookings | Counting ad spend only |
| Effective commission rate | Commission invoiced ÷ platform revenue | Using the rate card instead |
| Commission as share of revenue | Commission invoiced ÷ all revenue | Dividing by platform revenue |
The third row is the exposure number: it says what a platform rate change does to your business, rather than to one channel of it.
What counts as acquisition
Everything whose purpose is producing a booking. Being strict here is the difference between a number you can act on and a number that flatters you.
- Agency or freelancer fees
- Ad spend across every platform, including brand campaigns
- Content production — writing, photography, video
- Tools: booking engine, CRM, email, analytics
- A fair share of internal staff time, costed at what you actually pay
Two things people leave out and should not. The retainer, because excluding it is how a 4% cost per booking gets reported by a business paying $1,750 a month. And the booking engine subscription, because it exists solely to take direct bookings.
Two things that are not acquisition: card processing, which is collection; and the time spent servicing a booking after it is made, which is operations.
Reading the answer
Put the two figures side by side.
| If | Then |
|---|---|
| Cost per direct booking well below effective commission | Spend more. Every booking moved is margin. |
| Roughly equal | Neutral on price, still worth it for the customer data — but do not scale spend yet. |
| Above effective commission | Stop buying traffic. Fix conversion first. |
That last row is common and it is almost never a spend problem. An operator paying above commission to acquire is usually sending well-targeted traffic to a page that hides the price or a checkout that fails on a phone — the funnel piece covers where.
Why it improves and commission does not
This is the part that makes the whole exercise worth doing, and it is not visible in a single month’s figures.
Commission is a fixed percentage. It does not fall because you have been selling through the platform for five years; if anything it rises as visibility programmes become less optional.
Acquisition cost compounds downward. A page that ranks keeps ranking. An email list keeps converting. A returning customer costs nothing. The same spend produces more bookings in year two than in year one, which means cost per direct booking falls while effective commission does not.
Commission is rent. Acquisition is an asset that gets cheaper.
You can model the commission side of this with the OTA commission calculator, and the levels we charge are on the pricing page so the retainer line in your own calculation is not a guess.
Our free audit covers search visibility, AI-answer presence, booking flow and what your OTA channel is costing you. Written, and yours whether you hire us or not.