“Guests who reserve rooms via agents are paying over the odds because hotels have to pay 15% plus VAT on their gross revenue for each booking,” they explained. “For small owner-managed hotels, commission fees inflate costs at the expense of guests who are unaware that they would usually get a better deal by booking directly.” According to Raphael and Balmer, the growing power of OTAs stems from internet search results being dominated by marketing companies. “Google, for example, sells advertising to the highest bidder on a pay-per-click basis which enables third part agents such as Booking.com to lead search results using the name of the hotel as bait. When travellers click on these ads at the top of the search page, few realise that they are dealing with a commission charging agent.” The GHG said many hotels claim they have to use booking agents to fill empty rooms and fail to analyse the impact of OTAs on the bottom line. However, it highlights that some hotels are now providing incentives for guests who book directly. Get the full story at Travolution