The Real Cost of Online Travel Agent (OTA) Dependency

An aerial image of a full RV park on a sunny summer day

If your RV park fills up every summer, you might think your booking strategy is working. And maybe it is. But if most of those bookings are coming through Hipcamp, Campspot, Outdoorsy, or any other online travel agency, you are paying for that occupancy in ways that do not always show up where you expect them to.

This is the real cost of OTA dependency, and it is something every park owner needs to understand before they look at their revenue numbers and feel good about what they see.

What OTAs Actually Cost You

The commission structure on most OTA platforms runs between 8% and 15% per booking. On a $50 nightly site that does not sound catastrophic. But run it across a full season on 40 sites and you are handing over tens of thousands of dollars in revenue that never hits your bank account. It shows up in your gross revenue line but disappears before it ever becomes cash you can use.

That is the first problem. Gross revenue looks strong. Net revenue tells a different story.

The second problem is data. When a guest books through an OTA, the platform owns that relationship. You get a name and a date. You do not get an email address you can market to, a phone number to follow up with, or any real ability to build a direct relationship with that guest. You filled the site. The OTA built their list.

The third problem is pricing control. Many OTA agreements include rate parity clauses, meaning you cannot offer a lower price on your own website than you list on their platform. So even if you build a beautiful direct booking system, you are not allowed to incentivize it with a better rate. You are competing with a platform that has a bigger marketing budget than you and your hands are partially tied.

What It Does to Your NOI

Net Operating Income is the number that determines what your park is worth. Every dollar you lose to OTA commissions is a dollar that does not flow through to NOI. And because parks are valued on a cap rate multiple, losing $20,000 a year in commissions does not just cost you $20,000. At a 7% cap rate, it costs you nearly $285,000 in property value.

That is not a rounding error. That is real money that disappears because of how your bookings are structured.

What a Healthy Booking Mix Looks Like

This is not an argument against using OTAs. They have a place, especially for filling shoulder season gaps, reaching new guests who have never heard of your park, and maintaining visibility on platforms where your competitors are listed. The goal is not zero OTA bookings. The goal is not being dependent on them.

A healthy booking mix for a stabilized park trends toward 60 to 70 percent direct bookings over time. That means your own website is converting, your repeat guest rate is strong, and you have an email list you actually use. OTAs become a tool you deploy strategically, not a lifeline your revenue depends on.

Getting there takes time and intentional effort. It means building a direct booking engine, capturing guest emails at check-in, creating a reason for guests to come back and book directly next time, and tracking your booking source every single month so you know whether your mix is improving.

How to Track This in Your Books

If you cannot see OTA commissions as a separate line item in your financials right now, that is the first thing to fix. Gross booking revenue and net revenue after platform fees need to live in different places so you always know what you are actually keeping.

From there, track direct bookings as a percentage of total bookings monthly. Watch that number. It is one of the most important operational KPIs your park has, and most owners are not tracking it at all.

The parks that build long-term financial strength are the ones that treat their booking channel mix as a financial strategy, not just a marketing decision. Those two things are the same thing, and the sooner you run them together, the better your numbers will look.

And if you have not grabbed a copy of my book yet, ๐—™๐—ฟ๐—ผ๐—บ ๐—ข๐—ณ๐—ณ๐—ฒ๐—ฟ ๐˜๐—ผ ๐—ข๐—ฝ๐—ฒ๐—ฟ๐—ฎ๐˜๐—ถ๐—ผ๐—ป: ๐—ง๐—ต๐—ฒ ๐—–๐—ผ๐—บ๐—ฝ๐—น๐—ฒ๐˜๐—ฒ ๐—ฅ๐—ฉ ๐—ฃ๐—ฎ๐—ฟ๐—ธ ๐—œ๐—ป๐˜ƒ๐—ฒ๐˜€๐˜๐—ผ๐—ฟ’๐˜€ ๐—š๐˜‚๐—ถ๐—ฑ๐—ฒ ($49), it covers the full financial and operational management framework for running your park with the discipline it deserves. You can get it direct here: wendipvifinancial.gumroad.com/l/kqmyb, or Amazon has it too, just search author Wendi Rook.

Read this next “What Financial Reports Should You Review Every Month”

Comments

3 responses to “The Real Cost of Online Travel Agent (OTA) Dependency”

  1. […] Read this next: The Real Cost of Online Travel Agent (OTA) Dependency […]

  2. [โ€ฆ] Read this next: The Real Cost of Online Travel Agent (OTA) Dependency [โ€ฆ]

  3. […] Also look at OTA dependency. If 60% or more of bookings come through a single platform like Hipcamp or Campspot, you are buying a business with a single point of failure in its revenue stream. A platform policy change or commission increase can materially impact your income overnight. I wrote about this in The Real Cost of Online Travel Agent OTA Dependency. […]

Leave a Reply

Discover more from PVI Financial

Subscribe now to keep reading and get access to the full archive.

Continue reading