Economic Leakage - An Uncomfortable Truth
With some OTA commissions reaching 45%, the gap between what travellers spend and what destinations keep has never been wider. A Glasgow-born entrepreneur living in Turkey believes the industry can fight back.
Every year, billions of pounds flow through the global tourism economy. A substantial portion of that money never reaches the destinations where tourism actually takes place. It does not vanish through waste or corruption. It drains away through the everyday mechanics of how travel is bought and sold online.
Online travel agencies, led by Booking.com, Expedia and their peers, solved a genuine problem when they first appeared. They offered smaller hotels and independent operators a level of visibility that would have been impossible to achieve alone. But the cost of that visibility has grown enormously. Commission rates now range from 15% at the low end to as much as 45%, with revenue processed offshore and contractual clauses that in many cases prevent operators from undercutting OTA prices on their own websites.
The result is a structural transfer of wealth away from the places where tourism happens and towards corporate platforms headquartered far from the beaches, mountains and city centres that travellers come to visit. This is economic leakage, and it matters far beyond the balance sheets of individual hotels. It undermines destination resilience, weakens the customer relationships that properties need to build loyalty, and erodes the financial foundations that make year-round tourism viable.
Martin Rosenberg has watched this dynamic play out at close quarters. A Glasgow-born entrepreneur who has lived in Antalya for the past two decades, he has observed Turkey’s extraordinary growth as a tourism destination alongside what he regards as a deepening dependency on intermediaries that extract more than they contribute.
“The travel industry has always had a certain amount of leakage,” he said in a recent interview for the Balancing Tourism Podcast. “Commissions were being paid, but it was usually around 10 to 15% with a tour operator. And you were getting something for that. It was a two-way conversation. There was an element of value.”
That equation, Rosenberg argues, has shifted dramatically. Where traditional travel agents earned their margin through advice, curation and a genuine service relationship, the OTAs have scaled the transactional side while stripping out the personal element. The commission has climbed, but the value exchange has narrowed.
The numbers are striking. A mid-range, hundred-room Mediterranean hotel charging roughly £100 per night and operating at reasonable occupancy could be generating around £2 million in annual revenue. At commission rates of 20 to 25%, that is £400,000 to £500,000 flowing out of the local economy every year from a single property. Scale that across a resort destination with hundreds of hotels, and the aggregate leakage is enormous. And Turkey’s hotels are frequently far larger than a hundred rooms.
“That’s not even a big hotel by Turkish standards,” Rosenberg pointed out. “You’ve got properties with 400, 500, 600 rooms. And then you’ve got the smaller places, the family-run guesthouses, where even a modest amount of leakage can be the difference between surviving and going under.”
The lost relationship
Beyond the raw financial cost, there is a subtler but arguably more damaging consequence: the loss of the customer relationship. It is the hotel that greets the guest, serves the meals, and delivers the experience. Yet it is the OTA that holds the transactional relationship and owns the data.
Rosenberg is blunt about the industry’s role in allowing this to happen. Hotels, he believes, have too often failed to engage meaningfully with their own guests.
“It’s very rare that I’ve checked into a hotel, stayed for a week, and left after someone has actually sat down and had a conversation with me,” he said. “They might provide a service, give me a nice meal, take money from me at the spa. But nobody is building a relationship. And that’s a big failing.”
The consequences compound over time. Repeat guests continue booking through OTAs because nobody at the hotel thought to convert them to direct bookers. The CRM flags a returning customer, but the front desk never acts on it. The commission bleeds out again and again for the same guest, with the hotel paying each time for a relationship it could have owned.
How did we get here?
Rosenberg traces the roots of the problem to the late 1990s, when the internet first opened up new marketing possibilities. Hotels, he recalls, treated their websites as digital brochures and assumed that simply having an online presence would generate bookings. They cut their marketing budgets, neglected SEO, and failed to promote their own channels. The OTAs, by contrast, invested aggressively in digital marketing and filled the vacuum.
“The OTAs came along at exactly the right time,” Rosenberg said. “They became clever marketers. The hotels sat back and thought, the bookings are coming in through the OTAs, so we don’t really need to do much anymore. They cut back on their own marketing spend, and that’s when the dependency set in.”
He cited industry commentators who suggest hotels should be investing five to seven per cent of turnover in marketing. Most, he said, are spending three per cent or less. That gap has allowed OTAs to consolidate their grip.
Legal challenges have done little to alter the balance. Rate parity clauses have been contested across Europe, and class actions have been filed against major OTAs in several countries. But Rosenberg sees a paradox in the approach. Hotels are suing the platforms they continue to depend on for distribution, and any penalties imposed will likely be funded by the very commissions those hotels are paying in the interim. “You’re actually paying for them to be able to pay you back,” he observed.
A video-first alternative
Rosenberg’s response has been to build Overseas Info TV, a zero-commission, video-first discovery platform designed to connect travellers directly with hotels and tour operators. The idea, which he first conceived in 2008, was rooted in a simple observation: families spending £5,000 or more on a holiday deserve to see what they are actually getting, and video delivers a level of honesty that photographs and written reviews cannot match.
“Photographs can be doctored,” he said. “And most hotel photos are dead. Empty dining rooms, empty bars, empty pools. Video brings it all to life. People want reality. They’re not looking for full-blown productions.”
He pointed to the problem of fake reviews as further justification for the video approach, noting that TripAdvisor itself has acknowledged finding around two million fraudulent reviews per year. Video, while not entirely immune to manipulation, raises the bar considerably.
The platform operates on a flat annual fee rather than commission, with three pricing tiers starting at €300. The logic, Rosenberg explained, is that an upfront commitment encourages hotels to actively participate, whereas a commission-only model creates passivity. “If they’re only paying when an OTA sells a room, what are the hotels actually doing? There’s no partnership in that. Good business is where both sides work together.”
The AI question
The rise of AI-powered booking agents introduces a new dimension to the debate. As tools such as ChatGPT, Gemini and Perplexity begin to influence how travellers research and eventually book their holidays, the question of who captures that relationship becomes urgent.
Rosenberg acknowledged that the major OTAs will invest heavily to ensure AI agents route traffic through their platforms. But he sees a window for properties and smaller platforms that invest in their own AI-readiness. He noted that despite its modest scale, Overseas Info TV has performed well in AI visibility checks, with ChatGPT in particular citing the platform’s video content, independence and direct-booking model as reasons for recommendation.
Whether AI agents will ultimately entrench OTA dominance or open new pathways for direct booking remains an open question. But Rosenberg’s view is clear: hotels that fail to invest in their own digital presence and AI optimisation will find themselves locked out of yet another distribution channel. “They can intercept it,” he said of the AI opportunity, “but they have to put the effort in.”
A sustainability argument
There is a growing case for framing direct booking as a matter of social responsibility. When a traveller books through an OTA, a significant share of their spending exits the destination economy before it can circulate locally. That money does not pay local taxes, employ local staff, maintain local infrastructure or fund the services on which both residents and visitors depend.
Turkey has already taken regulatory action, restricting domestic OTA bookings in part to prevent locally earned income from flowing offshore to platform shareholders. These conversations, Rosenberg noted, are now playing out across Europe and beyond.
“It’s all about sustainability,” he said. “I’m a businessman. If you make an investment and grow a business, of course you’re entitled to make money. But it should be fair.”
The direct booking movement may not displace the OTAs. Rosenberg is realistic about that. But he believes incremental change is both possible and necessary, and that governments, destination management organisations and the industry at large need to start treating economic leakage with the seriousness it deserves. It is, as he put it, a conversation too many conferences are reluctant to have, for fear of upsetting the major platforms.
If tourism is to become genuinely sustainable, the flow of money through the system matters as much as the flow of visitors. And right now, far too much of it is draining away.
___
To learn more about Overseas Info TV and its zero-commission discovery platform, visit www.overseasinfo.tv
This article is based on an interview with Martin Rosenberg for the Balancing Tourism Podcast.
Constance Moofushi Maldives
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Ideal for beach holidaymakers, this spa hotel lies on Ari Atoll, right by the sea.
Facilities
110 rooms are available to guests at this resort, which includes a reception desk. The complex provides a safe, 24-hour room service, a business centre and a hotel doctor. Wireless internet access is provided in public areas. There are also a number of shops that make for great strolling and browsing.
Rooms
Air conditioning and a fan ensure that rooms maintain comfortable temperatures. Guests can enjoy the sea view from a balcony or terrace. Guests are sure to get a good night's sleep in the sofa bed. Children's beds can be requested for younger guests. A safe and a minibar are also available. A mini fridge and a tea/coffee station are standard features. Equipped with a telephone, a TV, a radio, a CD player, a DVD player and WiFi (no extra charge), the rooms provide many ways for guests to stay connected and entertained. Slippers are included. A hairdryer and bathrobes are available in the bathrooms, which are equipped with a shower and a bathtub. Family rooms are available for parents with children.
Sports/Entertainment
While the adults swim a few laps in the outdoor pool, children can enjoy splashing about in their own swimming area. Sun loungers and parasols the sun terrace complete the holiday. For guests who wish to keep active, beach volleyball and fishing are available. Water sports available at the resort include windsurfing, paddle boating, canoeing, sailing, catamaraning, kayaking, snorkelling and diving. Sport and leisure facilities at the resort include a gym, billiards and yoga. Various wellness options are available at the resort, including a spa, a beauty salon, massage treatments and anti-ageing treatments.
Meals
Various dining options are available, including a restaurant, a dining room and a bar. All-inclusive is offered as a catering option. Special extras await all-inclusive guests – snacks as well as a wide selection of alcoholic and non-alcoholic beverages and a complimentary minibar. Breakfast, lunch and dinner are available. The menu also offers gluten-free meals and vegetarian dishes.
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SponsorCalista Luxury Resort Hotel
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Bonita Beach
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Ask MeLocation
Centrally located in Golden Sands, this hotel is near a sandy beach.
Facilities
The friendly staff at the reception desk in the lobby are happy to answer any questions. Valuables can be stored safely and conveniently in the safe. Wireless internet access in public areas allows guests to stay connected. A variety of shops are available, including a supermarket. Guests arriving by car can park their vehicles in the car park.
Rooms
Rooms feature a living area and a bathroom. Air conditioning ensures comfortable temperatures. Guests can enjoy the sea view from a balcony or terrace. All rooms are carpeted and include a double bed and a sofa bed. Separate bedrooms are available. Children's beds and extra beds can be requested for younger guests. A minibar is provided. A telephone, satellite television and WiFi (for a fee) ensure optimal comfort. A shower and a bathtub are included the bathrooms. Family rooms are available for parents with children.
Sports/Entertainment
The outdoor pool complex includes a children's swimming area and is ideal for working out or just relaxing. Parasols and comfortable sun loungers are available on the sun terrace. A variety of refreshing drinks await guests at the pool bar. Leisure options at the hotel include jet skiing and banana boat rides. For a fee, guests can also enjoy billiards and massage treatments.
Meals
The dining area includes a restaurant and a bar. Catering options include half board, full board and all-inclusive. Breakfast, lunch and a comprehensive dinner buffet offer plenty of delicious variety. Staff are also happy to provide gluten-free meals. The hotel offers a selection of alcoholic and non-alcoholic beverages.
Payment
The hotel accepts the following credit cards: VISA and MasterCard.
Positano Art Hotel Pasitea
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This welcoming hotel overlooks the gulf of Naples, on the rock of Positano. The surrounding area is particularly peaceful and from the hotel guests are offered stunning panoramic views of the area. The historical centre is around 1 km from the hotel. Shopping opportunities are located directly in front of the hotel, the nearest nightclub is about 500 m from the hotel and Naples airport is around 80 km away.
Facilities
5 suites and 20 double rooms are located on 4 storeys and can be reached by lift. The reception desk in the lobby is staffed round the clock. A cloakroom, a safe and a currency exchange service are available. Wireless internet access in public areas allows guests to stay connected. There are a number of shops as well. Guests arriving by car can park their vehicles in the garage or in the car park. Other services include medical assistance, room service, a laundry service and a hairdresser.
Rooms
Air conditioning and central heating ensure that rooms maintain comfortable temperatures. Guests can enjoy the sea view from a balcony or terrace. A safe and a minibar are also available. A mini fridge and a tea/coffee station are standard features. An ironing set is provided for guests' convenience. Other features include a direct dial telephone, a television with satellite/cable channels and WiFi. The bathrooms have a shower, a bathtub and a whirlpool bath. For additional convenience, bathrooms also provide a hairdryer. The hotel has family rooms and non-smoking rooms.
Sports/Entertainment
The outdoor pool complex provides invigorating refreshment. There are many ways to relax or stay active at the hotel, including tennis, a gym and a beauty salon.
Meals
Various dining options are available, including a dining room, a breakfast room, a café and a bar. Bed and breakfast can be booked. A generous breakfast buffet guarantees a great start to the day.
Payment
The hotel accepts payment by major credit cards.
red rocks life changing experiences
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Blue Waves Resort
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The hotel is situated in a quiet location, next to the beach. The nearest city of Malinska is only 2 km away, easily accessible either by sea promenade or by car. The nearest public transport links are in the centre of Malinska. The distance to the nearby Rijeka Airport (RJK) is only 15 km.
Facilities
Guests have a choice of 97 rooms, including 33 junior suites, 17 suites and 46 double rooms, located in a 2-storey main building and several auxiliary buildings. This hotel has a lift and a 24-hour reception desk. The hotel provides a safe, a TV room, a playroom, a childcare service, an alarm call service, a laundry service and a conference room. Wireless internet access (for a fee) is provided in public areas. There are a number of shops as well. Children can enjoy the playground. Guests arriving by car can park their vehicles in the garage (for a fee) or in the car park. Services include a hotel shuttle bus.
Rooms
Rooms feature a living room and a bathroom. Air conditioning ensures comfortable temperatures. Guests have a sea view from the balcony or terrace, which are standard features of some rooms. Rooms include a sofa bed. Children's beds can be requested for younger guests. A safe and a minibar are also available. Guests will also find a refrigerator included among the standard features. A direct dial telephone, a television with satellite/cable channels and WiFi are provided as well. Bathrooms are equipped with a shower and a bathtub, as well as a hairdryer. Family rooms are available for parents with children.
Sports/Entertainment
There are indoor and outdoor pools and a children's swimming area. Refreshing drinks at the pool bar and a relaxing soak in the hot tub offer the perfect way to unwind. A short break or an entire afternoon on the sun terrace, which features sun loungers and parasols, is time well spent. With sailing and kayaking available, the hotel also caters to water sports enthusiasts. Jet skiing is organised by third-party operators. Sport and leisure facilities at the hotel include a gym and table tennis. The hotel offers a range of facilities in the wellness area. Options include a spa and, for an additional fee, a sauna, a steam bath and massage treatments. An entertainment programme and a kids' club round out the entertainment options.
Meals
Various dining options are available, including a dining room and a bar. Delicious specialities await guests in 2 non-smoking, air-conditioned restaurants. Catering options include bed and breakfast and half board. A delicious and varied buffet is prepared for breakfast and dinner. Special culinary options, such as vegetarian dishes, are also available.
Payment
The following credit cards are accepted: VISA, Diners Club and MasterCard.
The Berkeley City Club
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This club is located in Berkeley. The nearest airport is Oakland - Metropolitan Int. (OAK).
Facilities
Guests have a choice of 35 non-smoking rooms. The hotel has wheelchair-accessible facilities.
Rooms
The hotel offers a range of options for comfortable accommodation with various amenities. WiFi is also available to guests.
Sports/Entertainment
A range of sport and leisure activities ensure a lively and interesting stay. The indoor pool complex is ideal for relaxation and exercise.
Meals
Various dining options are available, including a restaurant, a dining room and a bar. Bed and breakfast can be booked.
Parador de Nerja
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This upmarket hotel enjoys a location atop sheer cliffs looking out over the Costa Tropica. Wonderful panoramic views are to be had over the Mediterranean Sea and the African coastline.
Facilities
The hotel has 2 suites, 3 single rooms and 93 double rooms, which are located on 3 storeys and are reachable by lift. Staffed 24 hours a day, the reception desk makes check-in and check-out easy. A cloakroom, baggage storage service, safe and currency exchange service are available. Wireless internet access allows guests to stay connected while on holiday. The tour desk offers assistance with booking excursions. Wheelchair-accessible facilities are available. There are also a number of shops that make for great strolling and browsing. The grounds of the hotel feature a playground and a lovely garden. Guests arriving by car can park their vehicles in the car park. Further services include medical assistance, a transfer service, room service, a laundry service and a coin-operated laundry. Complimentary newspapers are available.
Rooms
Air conditioning and central heating ensure that rooms maintain comfortable temperatures. A balcony is included as standard in some rooms. Rooms have a double bed or a king-size bed. Extra beds can be requested. A safe, a minibar and a desk are also available. Additional features include a mini fridge and a tea/coffee station. A direct dial telephone, a television with satellite/cable channels and WiFi (no extra charge) provide all the essentials for a comfortable holiday. A selection of pillows ensures a comfortable stay. Bathrooms are equipped with a shower and a bathtub, as well as a hairdryer. As an extra convenience, bathrooms provide cosmetic products. Some of the wheelchair-friendly rooms have a wheelchair-accessible bathroom. The hotel has smoking rooms.
Sports/Entertainment
The outdoor pool complex provides invigorating refreshment. Sun loungers and parasols are available on the sun terrace. Refreshing drinks are served at the poolside snack bar. There are many ways to relax or stay active at the hotel, including tennis, paddle tennis, diving and a gym.
Meals
Dining facilities include a dining room, a café and a bar. Guests can enjoy the culinary delights of the non-smoking, air-conditioned restaurant, which provides high chairs for children. Catering options include bed and breakfast, half board and full board. A continental breakfast buffet guarantees a great start to the day. At lunch and dinner, guests can choose between à la carte and a set menu. The hotel also offers picnics.
Payment
All major credit cards, including American Express, VISA, Diners Club and MasterCard, are accepted for payment.
Best Western Plus Frontier Motel
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With its great location in stunning Owens Valley, this hotel is just a short drive from many businesses and organisations, such as Owens Lake Project, BLM Crystal, Geyser Bottling Plant and the U.S. Forest Service. Lone Pine Airport is just one mile away, making travelling easy and stress free.
Facilities
Guests have a choice of 73 rooms. The hotel provides a conference room, a business centre and a coin-operated laundry. Wireless internet access is provided in public areas. The hotel has wheelchair-accessible facilities. Guests arriving by car can park their vehicles in the car park.
Rooms
Rooms are equipped with air conditioning. A refrigerator, a microwave and a tea/coffee station are standard features. An ironing set is provided for guests' convenience. A telephone, a TV, a radio, an alarm clock and WiFi are provided as well. Bathrooms are equipped with a shower and a bathtub, as well as a hairdryer. The hotel has family rooms and non-smoking rooms.
Sports/Entertainment
The sports and entertainment facilities at the hotel ensure that guests have plenty of activities to choose from during their stay. The outdoor pool complex is ideal for exercise and relaxation. After an eventful day, guests can work out and recharge in the gym.
Meals
Bed and breakfast can be booked.
Best Western Plus Hotel Bahnhof
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This hotel is located right in the heart of Schaffhausen.
Facilities
Guests can enjoy the pleasant ambience of one of the 45 rooms. Wireless internet access is provided in public areas. Guests arriving by car can park their vehicles in the car park.
Rooms
Air conditioning ensures that rooms maintain comfortable temperatures. Rooms include a double bed. Children's beds and extra beds can be requested for younger guests. Amenities in some rooms include a safe, a minibar and a desk. A mini fridge and a tea/coffee station are standard features. A flatscreen television and WiFi provide all the essentials for a comfortable holiday. Guests will also find slippers in their rooms. A vanity mirror and bathrobes are provided in the bathrooms, which include a shower and a bathtub. The hotel has family rooms and non-smoking rooms.
Sports/Entertainment
After an eventful day, guests can work out and recharge in the gym.
Meals
Bed and breakfast can be booked.
Nepal
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