Commission leakage model
Size what intermediated distribution costs you today, and what a defined shift to direct is worth. The model deliberately separates gross commission avoided from net contribution, because the two are rarely close.
This is a gross figure. Direct acquisition carries its own cost — booking engine fees, payment gateway charges, paid media, martech and the staff time to run it. In our engagements that direct cost of sale has run between 6% and 11% of direct revenue. Deduct it before treating any of this as margin.
RUN THE FULL DIAGNOSTIC →What this
model leaves out
Commission is the visible cost of intermediated distribution. Across our diagnostics it has accounted for roughly 45-60% of the true economic cost.
Rate suppression
Demand sourced from price-sorted marketplace results is priced for that environment. In our sample the direct-channel ADR premium on matched date and room-type pairs ran between 6% and 19%, median 11.4%. At 80% marketplace share that is worth roughly 8.8% of total room revenue — a cost comparable to the commission itself, and invisible in the accounts.
Guest data forfeiture
An intermediated booking transfers a room night, not a relationship. Properties with a functioning guest data asset run repeat ratios of 18-27%; those without run 3-6%. The gap is not explained by product quality — several of the lowest-repeat properties we assessed held the highest review scores in their compset.
Loyalty transfer
A 20% commission with a 10% funded loyalty discount costs approximately 28% of the gross rate, because commission is calculated on the discounted amount. The behavioural cost is larger: you are paying to increase the probability that the guest returns to the marketplace rather than to you.
Demand substitution
In path analysis across two engagements, 31% and 27% of marketplace reservations were preceded within 48 hours by a branded search or a direct site visit. Those guests had already chosen the property. The marketplace did not generate that demand — it intercepted it, and charged for the introduction.
Where your inputs sit against the sample
Drawn from the 2026 India Hotel Distribution Benchmark, covering 412 independent and small-chain properties across 22 cities.
| Measure | Bottom quartile | Median | Top quartile |
|---|---|---|---|
| Marketplace share of room nights | 86% | 71% | 44% |
| Blended commission rate | 22.4% | 19.4% | 15.1% |
| Commission as % of rooms revenue | 19.3% | 13.8% | 6.6% |
| Direct-channel ADR premium | +6.3% | +11.4% | +19.0% |
| Demand substitution rate | 34% | 28% | 11% |
Quartiles are ordered so that the top quartile represents the strongest commercial position, not the highest numeric value.
A number is not a diagnosis
This model sizes one deficit. The full diagnostic assesses distribution mix, parity integrity, conversion capability and attribution accuracy against your own data, and returns each finding quantified and ranked.
