OTA Commissions (Booking, Expedia): Impact on Margin and Accounting (2026)

Online travel agencies (OTAs) such as Booking.com and Expedia often generate 40 to 70 % of an independent hotel's bookings. Their commission, ranging from 15 to 25 %, is more than a cost line: recorded incorrectly, it distorts your margin, your VAT base and your reading of RevPAR. Here is the accounting and tax method to apply in 2026.

The accounting treatment depends on the OTA's contractual model.

• Agency model (most common with Booking): the guest pays the hotel directly on arrival. The OTA then invoices its commission, usually monthly. The hotel collects 100 % of the price, then pays out the commission.
• Merchant model (frequent with Expedia Collect): the OTA charges the guest, keeps its commission, then remits the net amount to the hotel. You never receive the gross amount in your bank account.

This distinction matters: in the merchant model, the temptation to record only the net transfer received is strong. That is an accounting and tax error.

The principle is non-negotiable: your revenue equals the price paid by the guest (the gross amount), not the net amount after commission. The OTA commission is a separate operating expense.

Why? Recording the net amount artificially understates your revenue, distorts your output VAT base and hides your true acquisition cost. You also lose all margin-analysis capability.

Worked example: a 100 EUR booking at 18 % commission#

For a room night sold at 100 EUR including tax (hotel VAT at 10 %), with an 18 % commission:

• Net revenue: 90.91 EUR (revenue account)
• Output VAT 10 %: 9.09 EUR
• OTA commission: 18 EUR recorded as an expense (intermediary fees account)

The gross margin after commission is 72.91 EUR excluding tax, an acquisition cost of 19.8 % of net revenue. Had you booked 82 EUR of net revenue, your output VAT and your margin would have been distorted simultaneously.

Typical entry (merchant model, 82 EUR received for 100 EUR sold):

• Debit Bank: 82 EUR
• Debit OTA commissions: 18 EUR
• Credit Services revenue: 90.91 EUR
• Credit Output VAT: 9.09 EUR

Booking (headquartered in the Netherlands) and Expedia (EU entities) invoice their commissions VAT-free to a French taxable customer. The service falls under intra-EU B2B rules: VAT is due by the customer, meaning you, through the reverse charge mechanism.

In practice, on the VAT return:

• you declare the VAT due at 20 % on the commission amount,
• you simultaneously deduct that same VAT (if you have full recovery rights),
• the operation is cash-neutral but mandatory for reporting purposes.

On an 18 EUR commission, you self-assess 3.60 EUR of output VAT and 3.60 EUR of deductible VAT. Omitting this line exposes you to a reassessment, even though the net impact is zero.

Reliable accounting rests on a three-way reconciliation, ideally monthly:

• OTA extranet (Booking statements, Expedia invoices): gross amount booked, commissions invoiced, cancellations.
• PMS / channel manager: room nights actually consumed, no-shows, rate changes.
• Bank receipts: OTA transfers (merchant model) or guest payments (agency model).

Frequent discrepancies come from cancellations not passed through, no-shows charged by the OTA but absent from the PMS, and period mismatches (booking in month N, stay in month N+1). A monthly reconciliation table prevents these gaps from accumulating until year-end.

Classic RevPAR (revenue per available room) ignores distribution cost. Net RevPAR incorporates the OTA commission and gives a real view of profitability per channel.

A hotel showing 90 EUR of RevPAR with 60 % OTA bookings at 18 % loses about 9.7 EUR per room in commissions, a net RevPAR close to 80 EUR. Tracking this acquisition cost per channel is the foundation of any distribution-mix decision.

Every commission point saved drops straight to margin. Encouraging direct booking (on-site engine, member rate, respected parity but a non-price advantage such as an upgrade) reduces OTA dependency. A realistic target for an independent hotel: bringing the OTA share from 60 % down to 40 %, which can represent several thousand euros of annual margin recovered.

• Recording net revenue instead of gross: margin and VAT distorted.
• Forgetting the reverse charge on EU commissions.
• Failing to reconcile extranet, PMS and bank, causing unexplained discrepancies.
• Mixing commissions and payment fees (card fees are a separate expense).
• Ignoring net RevPAR and steering on overstated gross revenue.