Protecting Hotelier Profitability
Championing initiatives to reduce OTA fees, lower vendor costs, and prioritize owner profitability
Hotel ownership is a high-stakes business. Thin margins, rising labor and utility costs, and fierce competition all squeeze your bottom line. For many hoteliers, the biggest profit drains are invisible, or accepted as “just the cost of doing business.” But they don’t have to be. With focused strategy, transparency, and advocacy, we can protect and grow hotelier profitability across the board.
The OTA Commission Drain
One of the most obvious and deepest cuts to profit is OTA (Online Travel Agency) commissions. OTAs have become indispensable channels for reach and bookings, but they come with a price. The average commission rate ranges from 15 % to 30 %+ on bookings. That means for a $200 room, a $30–$60 cut may go straight to the OTA, before you even serve the guest.
Some industry analyses estimate that for every $100,000 in OTA-driven revenue, $15,000 to $25,000 might be surrendered in fees. That’s tens of thousands of dollars in lost margin, money that could otherwise fund staff, maintenance, marketing, or reinvestment in your property.
But OTA costs aren’t just about commissions:
Price parity clauses often prohibit offering lower rates on your own channels, throttling flexibility.
Metasearch & click fees also erode margin—platforms like Trivago or Google Hotel Ads charge per click or take a share of bookings.
Hidden payment processing or international card fees can chip away further, especially for cross-border bookings.
These combined burdens mask the true cost of distribution and make profitability a tougher battle.
The Vendor / Procurement Squeeze
Another major leak to profits is the vendor ecosystem: mandated suppliers, opaque rebates, and uncompetitive pricing.
Many franchise or brand systems enforce “approved vendors,” sometimes without rigorous transparency or competitive bidding. Rebates or kickbacks tied to those vendor relationships may benefit the brand (or mid-level managers), but not always the property owner. If those costs and margins aren’t fully disclosed, hotel owners are left underwriting inefficiency.
Furthermore, vendor costs (housekeeping, linens, tech services, maintenance) have been rising across the board. Hoteliers who don’t have negotiating leverage or visibility into pricing risk overpaying for goods and services they could get more fairly if given scale or support.
Why This Pillar Matters
Every dollar saved strengthens your business, your team, and your community. Here’s what protecting profitability can unlock:
More cash flow for property upkeep, staff bonuses, or upgrades
Greater ability to ride downturns or invest in growth
Better resilience against inflation or cost pressures
A stronger point of alignment between brand, owners, and vendors
Demonstrable ROI of owning versus simply operating
When owners actually see value in their systems and distribution, trust grows, loyalty strengthens, and the association becomes more relevant.
What Advocacy and Leadership Should Do
To defend hotelier profitability, a campaign must champion real, enforceable reforms:
OTA Negotiation & Direct Booking Tools
Advocate for reduced commission tiers or performance-based commission models
Provide (or negotiate) direct-booking platforms for owners to reclaim guest control
Incentivize brand.com bookings (e.g. exclusive packages)
Transparent Vendor Networks
Require full disclosure of vendor pricing, margins, rebates, and conflicts of interest
Enable open bidding and competitive alternative vendor inclusion
Audit and benchmark vendor costs regularly
Data Access and Accountability
Give owners clear, real-time reporting on OTA commissions, rebate flows, and vendor margins
Create benchmarking tools so owners can compare costs against peers
Group Leverage & Collective Buying Power
Use AAHOA’s scale to negotiate better rates collectively on vendors and distribution
Pool procurement, tech infrastructure, and marketing services to reduce duplication
Education and Best Practices
Teach owners how to audit their cost structures
Share case studies of hotels that reclaimed margin via negotiation or process optimization
MZ Patel’s Commitment to Profitability
Under MZ Patel’s leadership, the campaign’s emphasis on protecting hotelier profitability is rooted in lived experience. As a multi-property owner, franchise advocate, and founder of MHO Hotels, MZ has faced the exact pressures many hoteliers endure. His platform is built to:
Minimize unnecessary OTA dependence
Drive vendor transparency
Align incentives between owners and brand systems
Empower owners with tools to capture more margin
Profitability is a fundamental right of hotel ownership. AAHOA’s future is stronger when every owner has clarity, control, and the ability to reinvest in their business, their employees, and their communities.
