How OTAs Exploit Independent Hotels & Strategies to Compete Effectively
For independent hotels, Online Travel Agencies (OTAs) can feel like both a blessing and a curse. On one hand, they offer exposure and bookings, but on the other, they take high commissions, limit pricing flexibility, and make direct sales nearly impossible.
Unlike big hotel brands with strong loyalty programs, corporate contracts, and bigger marketing budgets, independent hotels often lack the leverage to fight back against OTAs. The result? Lower profits, lost customer relationships, and over-reliance on third-party bookings.
This article explores why independent hotels struggle the most against OTAs, how OTAs exploit their weaknesses, and proven strategies for fighting back.
1. Independent Hotels Have Less Negotiating Power with OTAs
Big hotel brands like Hilton, Marriott, and IHG negotiate lower OTA commission rates because of their large volume of bookings.
The OTA Commission Disadvantage for Independents
- • Major hotel brands often negotiate OTA commissions down to 10-12%.
- • Independent hotels, with no leverage, are often forced to pay 15-30% per booking.
- • Some OTAs charge even higher commissions for "preferred" status or extra visibility.
Why This Hurts Small Hotels
- → A 20% commission on a $200 per night booking means losing $40 per night—adding up to thousands per month.
- → Independent hotels, already operating on tighter profit margins, feel the impact more than large brands.
- → Small hotels don't have the budget to outspend OTAs in marketing, keeping them trapped in the OTA cycle.
💡 How to Fight Back:
- ✔ Limit OTA reliance by driving more direct bookings through email marketing and social media.
- ✔ Build strong partnerships with local businesses (tour companies, event venues) to generate referral bookings outside OTAs.
- ✔ Offer direct booking perks like free breakfast, parking, or flexible cancellation—things OTAs can't match.
2. OTAs Prioritize Big Brands Over Independent Hotels
How OTAs Favor Chain Hotels
- • OTAs rank hotels higher in search results if they pay higher commissions.
- • Larger hotel brands pay for premium placement, pushing independent hotels to the bottom.
- • Even when independent hotels offer better pricing, OTAs display chain hotels first to maximize their commission revenue.
Why This Hurts Small Hotels
- → Independent hotels struggle for visibility, even if they offer better value, more unique stays, or better service.
- → Travelers are more likely to click on the first few listings, reducing the chances that they'll see an independent hotel.
- → If an independent hotel can't afford premium placement fees, it is essentially invisible.
💡 How to Fight Back:
- ✔ Use Google Hotel Ads instead of relying on OTA rankings—Google allows you to compete directly with OTAs.
- ✔ Encourage guests to book direct by offering exclusive perks and price guarantees.
- ✔ Optimize your website for SEO to attract organic searches for local stays, instead of relying on OTA traffic.
3. Independent Hotels Lose the Guest Relationship
When a guest books through an OTA, the hotel doesn't receive the guest's email or direct contact details—the OTA does. This makes it difficult for independent hotels to build long-term relationships with their guests.
Why This Is a Major Problem for Small Hotels
- → No guest email = No direct marketing for future stays.
- → No guest relationship = No brand loyalty.
- → OTA guests are more likely to book another hotel on their next trip instead of returning.
Big hotel brands use their loyalty programs to get around this—independent hotels don't have that luxury.
💡 How to Fight Back:
- ✔ Train front desk staff to capture guest emails at check-in.
- ✔ Offer post-stay discounts or perks for direct rebooking.
- ✔ Build a loyalty program (even something simple like "Stay 3 nights, get 1 free").
4. Rate Parity Agreements Trap Independent Hotels in an Unfair System
Most OTAs enforce rate parity clauses, which means hotels can't offer lower prices on their own website than what they list on OTAs.
How This Hurts Small Hotels
- → Small hotels can't run exclusive website promotions without violating OTA agreements.
- → OTAs discount rates behind the hotel's back, making the hotel's direct price look higher.
- → Independent hotels lose direct business because OTAs trick guests into thinking they have the best deals.
💡 How to Fight Back:
- ✔ Offer value-added perks instead of lower prices (free breakfast, late checkout, room upgrades).
- ✔ Create package deals that bundle room rates with experiences OTAs can't replicate.
- ✔ Use member-only pricing or loyalty program rates that aren't subject to rate parity.
Breaking Free from OTA Dependency: A Strategic Approach
While OTAs will always play a role in hotel distribution, independent hotels in Ghana and across Africa can reduce their dependency and improve profitability through strategic action.
Build Your Direct Booking Engine
- → Invest in a user-friendly website with seamless booking
- → Optimize for mobile devices
- → Offer best rate guarantees
Leverage Social Media Marketing
- → Showcase your unique property features
- → Engage with potential guests directly
- → Run targeted advertising campaigns
Create Local Partnerships
- → Partner with tour operators and travel agents
- → Build relationships with corporate clients
- → Collaborate with local businesses
Implement Email Marketing
- → Build and nurture your guest database
- → Send personalized offers and promotions
- → Stay top-of-mind for repeat bookings
How Gold View Consulting Helps Independent Hotels in Ghana
At Gold View Consulting, we specialize in helping independent hotels in Accra and across Ghana break free from OTA dependency and build sustainable direct booking channels.
Original Article Reference
This article is based on insights from Parrie Bunnell's LinkedIn article. Read the full original article:{" "} The Independent Hotel's Battle: Why Small Hotels Suffer Most
The battle against OTA dominance is real, but it's not unwinnable. With the right strategies, independent hotels can reduce their reliance on third-party platforms, build direct relationships with guests, and improve their bottom line. The key is to start taking action today—every direct booking is a step toward greater independence and profitability.
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