Direct bookings vs OTAs: The real maths

Every holiday let owner has heard the advice: "Take more direct bookings and stop giving away commission." It sounds obvious. OTAs like Airbnb and Booking.com take a cut, direct bookings don't, so direct must win.

Except that's not the full equation. Direct bookings carry real costs of their own – they're just hidden in your time, your marketing spend, and your payment processor. The owners who scale profitably aren't the ones who blindly chase "100% direct." They're the ones who actually do the maths.

So let's do it properly.

What OTAs really cost you in 2026

Online travel agencies have quietly consolidated their fees, and the headline number is higher than most owners realise.

As of late 2025, Airbnb moved nearly all hosts onto a host-only service fee of around 15.5% in the UK. Crucially, that figure is before VAT – UK VAT at 20% is added on top of the fee, so the real deduction from your payout is closer to 18.6%. In the old model, guests paid a separate service fee and hosts paid roughly 3%. Now the platform takes a single flat commission, plus VAT, directly from your payout. Booking.com, meanwhile, has long operated a host-only model of around 15% (also potentially subject to VAT), but that climbs once you opt into programmes like Genius or Preferred Partner, where effective commission can reach 18–25%.

The trade-off is that for that commission, the OTA is doing real work. It's spending hundreds of millions on marketing to put your listing in front of guests, it acts as the merchant of record, and it absorbs fraud and chargeback risk natively. You're not just paying for a booking – you're renting a global distribution and payments machine.

What direct bookings actually cost

Here's the part the "go direct" crowd tends to skip. A direct booking is cheaper, but it is not free.

A typical direct booking costs somewhere between 4% and 10% of booking value once you account for everything, and can reach 15%+ for owners who market aggressively. The components usually break down like this:

• Payment processing: 2.5%–3.5% per transaction (Stripe, your booking engine, etc.).

• Booking engine / website hosting: a fixed monthly cost, amortised across your bookings.

• Marketing and guest acquisition: ads, SEO, social, email tools – the cost of being found without the OTA doing it for you.

• Chargeback and fraud risk: with direct bookings you're the merchant of record, so a fraudulent guest or disputed payment lands on you, not the platform.

• Your time: optimising listings, building and maintaining a website, creating social content, running ads, answering enquiries, and vetting guests – all the work the OTA would otherwise do or automate for you.

For a small portfolio, the marketing cost per booking is the swing factor. If guests already know your brand and book repeatedly, your true direct cost can sit near the payment-processing floor of ~3%. If you're buying every booking through paid ads, the gap to OTA commission narrows fast.

The real maths: a worked example

Let's take a £1,000 weekly booking and run it through each channel.

Channel	Commission / fees	You net
Airbnb (15.5% host fee + 20% VAT = ~18.6%)	£186	£814
Booking.com (15% base)	£150	£850
Booking.com (with Genius/Preferred, ~20%)	£200	£800
Direct – repeat guest (3% payment processing)	£30	£970
Direct – paid-ad acquisition (~10% all-in)	£100	£900

On a single £1,000 booking, a direct repeat guest puts roughly £156 more in your pocket than Airbnb once VAT on the fee is counted. Across 30 weeks of bookings a year on one property, that's about £4,680 – and that's before you factor in owning the guest's contact details so you can win the rebooking next year without paying for it again.

But notice the bottom two rows. A direct booking acquired purely through paid advertising nets £900 versus Airbnb's £814 – a real but smaller edge, and one that comes with you carrying the fraud risk and the workload. The maths only becomes overwhelming when direct bookings are repeat bookings.

Don't forget the opportunity cost of your time

There's one cost that never appears on an invoice: your own hours. Chasing direct bookings is genuine work – optimising listings, building and updating a website, creating social content, running ad campaigns, and fielding enquiries the OTA would otherwise have handled. If that adds up to five hours a week, the real question is: what is that time worth to you?

This is where the maths turns personal. If you already have a high-paying full-time job, the few hours each week you'd spend hunting direct bookings might be worth far more invested back into your career – or simply spent resting. Saving £150 of commission on a booking is a poor trade if those same hours could have earned you £300 elsewhere, or if they're the only downtime you get all week. The commission you "save" can quietly cost you more than it returns.

Flip it around, though, and the opposite holds. If hosting is your business, your time is already committed to it, and the hours you put into direct bookings compound into an asset you own outright – a guest list and a brand no platform can take away. The right answer depends entirely on what your hour is worth and what else it could be doing.

So what's the smart strategy?

The honest answer is that it's rarely all-or-nothing. The most profitable holiday let owners treat OTAs and direct as two tools doing different jobs.

OTAs are unbeatable for discovery – filling gaps in your calendar, reaching first-time guests, and getting a new listing off the ground. Direct is unbeatable for retention – turning a guest the OTA introduced you to into a repeat customer you never pay commission on again.

The winning play is to let the OTA pay to acquire the guest once, deliver a brilliant stay, capture their details (legitimately, with consent), and then move the relationship direct for every booking after that. You get the OTA's reach on the first booking and direct margins on every one that follows.

Key takeaways

• OTA commissions in 2026 are higher than many owners think: Airbnb's 15.5% fee becomes ~18.6% once VAT is added, and Booking.com runs ~15% rising to 20%+.

• Direct bookings are cheaper but not free – budget 4–10% for payment processing, marketing, and risk.

• Cost your own time in too: if a high-paying day job pays more per hour than the commission you'd save, chasing direct bookings can be a false economy.

• The biggest direct-booking win comes from repeat guests, where your real cost can fall to ~3%.

• Don't go "all direct." Use OTAs to find guests, then convert them to direct to keep them.

• Track net revenue per channel, not gross – the headline rate hides the true cost on both sides.

Frequently asked questions

How much commission does Airbnb charge hosts in 2026? In the UK, Airbnb now charges most hosts a single host-only service fee of around 15.5%, deducted directly from the payout. Note that VAT at 20% is added on top of this fee, so the real deduction is roughly 18.6% of the booking value. This replaced the older split model where guests paid a separate service fee.

Is Booking.com cheaper than Airbnb? Booking.com's base commission is around 15%. Airbnb's 15.5% fee has 20% VAT added on top, taking it to roughly 18.6% effective, so Airbnb often works out dearer on a like-for-like booking. However, opting into Booking.com visibility programmes like Genius or Preferred Partner can push its effective rate to 18–25% or more (and VAT may apply there too).

Are direct bookings really free? No. A direct booking typically costs 4–10% of its value once you include payment processing (2.5–3.5%), website and booking-engine costs, marketing, and chargeback risk. The cost is lowest for repeat guests who already know your brand.

Should I stop using OTAs entirely? For most owners, no. OTAs are the most cost-effective way to reach new guests and fill empty dates. The smartest approach is to use OTAs for discovery and convert satisfied guests into direct, repeat bookings over time.

What's the single best way to improve my margins? Focus on repeat direct bookings. Capturing guest details and earning re-bookings directly removes commission entirely on future stays – the highest-margin booking you can get.