When is OTA commission worth it for tour operators?

For many tour operators, the decision to work with an online travel agency (OTA) comes down to the cost of commission.

It is a fair consideration. When OTAs charge a percentage on every booking, operators may be tempted to focus solely on direct bookings.

However, looking at commission in isolation can make it harder to understand the real value an OTA can bring to your business. To see the full picture, it is important to consider the acquisition cost of each channel and whether you could have reached that customer another way.

Why OTA commission feels expensive

Whenever an OTA booking comes through, you can look at the transaction and see a percentage of the booking value going elsewhere. It can feel as though you are giving away revenue you have already earned.

Direct bookings can create a different impression. When a customer books through your website, there is no separate entry labelled ‘commission’, so the booking can appear to cost you nothing.

But the cost is still there.

Every booking has a customer acquisition cost

Every booking has a customer acquisition cost, but that cost looks different depending on the channel.

Channel	Typical cost structure
Google Ads	Pay per click or campaign
Social advertising	Pay per campaign or impression
SEO	Time and ongoing investment
Website	Development, maintenance, and optimisation
Email marketing	Software, content, and staff time
Referral programmes	Discounts, commissions, or incentives
OTA	Commission when a booking is made

You should also factor in staff time. The hours your team spends creating content, managing campaigns, maintaining your website, or building partnerships all contribute to the cost of acquiring customers.

OTA commission is often the most transparent acquisition cost, but it is not necessarily the most expensive. Direct bookings have a cost too; it may simply not be clearly accounted for in your Dashboard.

The real question is incremental demand

Does an OTA help you reach a customer who might not otherwise have booked with you?

Imagine a traveller searching for an experience in a destination they have never visited. They may know that they want to go kayaking, whale watching, or sightseeing, but they may not know your business. An OTA can put your experience in front of that traveller while they are already looking for something to do.

That is incremental demand: customers or bookings you may not have captured through your existing channels.

FareHarbor’s 2025 Market Report shows that affiliate bookings have continued to grow in several regions. In the Americas and the Caribbean, the share of affiliate bookings has steadily increased, while the share of direct bookings has softened slightly. In Australia, New Zealand, and Asia, online affiliates continue to show particularly strong growth.

Third-party distribution can give you access to demand that may be difficult or impossible to reach through direct channels alone.

The most expensive seat is the one that goes unsold

You may have a guide scheduled, a boat fuelled, a vehicle ready, or equipment reserved. Those costs exist whether your tour is full or only a few places are booked.

Once the tour departs, an empty seat or unused place can no longer generate revenue. That is where paying OTA commission can make strategic sense.

Imagine you have a departure with 20 places and 15 direct bookings. An OTA brings you three additional customers who would not otherwise have booked. You will pay commission on those three bookings, but you will also generate revenue from inventory that might otherwise have gone unused.

The question becomes less about retaining 100% of the ticket price and more about maximising the value of the inventory you already have.

When does OTA commission make strategic sense?

OTA distribution can make strategic sense when you need to:

• Fill departures with lower demand
• Reach new audiences
• Enter a new market
• Generate demand in quieter months
• Build awareness as your brand grows

When might OTA bookings not be helping your business?

You may want to rethink your strategy if you are:

• Paying commission on departures that consistently sell out through direct bookings
• Using OTAs for inventory that may not need additional demand
• Becoming too dependent on a single marketplace
• Allowing third-party bookings to replace strong direct demand
• Distributing inventory without considering your capacity or booking patterns

This is why there is no universal percentage of bookings that should come from OTAs. The right distribution strategy for your business depends on your products, region, capacity, booking window, customer behaviour, and growth goals.

How can you protect your most valuable inventory?

Using OTAs does not mean handing over your entire calendar. For example, you may want to prioritise direct bookings for:

• Departures that consistently sell out
• High-demand holidays or dates
• Experiences with limited capacity
• Premium products where protecting your margin is especially important

At the same time, you can make harder-to-fill inventory available to selected partners.

FareHarbor’s Affiliate Rules give operators greater control over when affiliates can book. This means your distribution strategy does not have to be all or nothing. You can adjust access based on the inventory, partner, day, or business need.

Stop asking, ‘Should I use OTAs?’

The better question is: ‘What do I need this channel to do?’

Before starting or expanding a relationship with an OTA, consider:

1. What business goal am I trying to achieve?
2. Where do I have available capacity?
3. Which customers or markets am I struggling to reach?
4. What would it cost to reach those customers another way?

These factors can help you determine the role OTAs and other channels should play in your distribution strategy.

The goal isn’t more OTA bookings. It’s smarter distribution.

Distribution is not about being everywhere. It is about using each channel for what it does best.

FareHarbor gives you the tools to manage availability and bookings across your distribution channels, helping you make more intentional decisions about where and when your inventory is available.

Ready to take a closer look at your distribution strategy? Book a demo with FareHarbor to see how you can manage your bookings and distribution in one place.

Frequently asked questions

Are OTA commissions worth it for tour operators?

OTA commissions can be worthwhile when they help you reach customers you may not otherwise have reached or fill inventory that might otherwise go unsold. Their value depends on your acquisition costs, demand, capacity, and business goals.

What is incremental demand?

Incremental demand refers to customers or bookings you may not have captured through your existing direct marketing and sales channels. OTAs can be one way to reach that additional demand.

Should tour operators sell every departure through an OTA?

Not necessarily. You may want to prioritise direct bookings for high-demand departures while making underbooked inventory available through selected third-party channels.

Are direct bookings really free?

No. Direct bookings still require investment in marketing, SEO, website development, email, advertising, staff time, and other customer acquisition activities.

How can tour operators manage OTA inventory?

Your approach should depend on your business goals and inventory. FareHarbor tools, including Affiliate Rules, can help you control when and where participating affiliates can access your inventory.