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.
Hotel Lilia
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The hotel is situated in the world famous Black Sea resort - Golden Sands, on 17 km. to the north of Varna, Bulgaria. It lies on the same beach line, and it is appropriate for families with children and young people which are looking for active rest or having fun.
Facilities
Guests are warmly welcomed at the reception desk in the lobby. 56 apartments and 174 double rooms are available. Wireless internet access allows guests to surf the internet and catch up on email. There are a number of shops as well. A garden provides extra space for rest and relaxation in the open air. Other services include a babysitting service on request, room service, a laundry service, a hairdresser and a hotel doctor.
Rooms
Air conditioning ensures that rooms maintain comfortable temperatures. Amenities include a minibar, a telephone and a television with satellite channels. A hairdryer is available in the bathrooms.
Sports/Entertainment
Sport and leisure activities are offered by the hotel and third-party operators. While the adults swim a few laps in the outdoor pool, children can enjoy splashing about in their own swimming area. Guests can relax and enjoy the sun loungers and parasols provided. A variety of refreshing drinks await guests at the pool bar. There are many ways to relax or stay active at the hotel, including a beauty salon and massage treatments.
Meals
The dining area includes a restaurant and a bar.
Days Inn by Wyndham Hemet
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Ask MeLocation
This hotel is located in Hemet. The nearest airport is Palm Springs - Bermuda Dunes (PSP).
Facilities
The hotel has a reception desk and features 64 rooms. Services and facilities include translation services, a laundry service and a conference room. Wireless internet access allows guests to surf the internet and catch up on email. 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. Some rooms have a balcony, which gives guests additional space for rest and relaxation. The rooms have a double bed and a sofa bed. Features include a refrigerator, a microwave and WiFi. A hairdryer is provided in the bathrooms. The hotel has family rooms and 1 smoking room.
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 provides invigorating refreshment. The hot tub in the pool area promises pure relaxation. Active guests can enjoy golf.
Meals
A continental breakfast guarantees a great start to the day.
Hyatt Place UC Davis
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This hotel is located in Davis. The nearest airport is Sacramento - Metropolitan (SMF).
Facilities
127 non-smoking rooms await guests at this hotel, which includes a lobby. The hotel provides a conference room and a business centre. Wireless internet access allows guests to stay connected while on holiday. The hotel has wheelchair-accessible facilities. Guests arriving by car can park their vehicles in the car park.
Rooms
Air conditioning ensures that rooms maintain just the right temperature. Rooms have a queen-size bed, a king-size bed or a sofa bed. Separate bedrooms are available. For guests' convenience, units include a refrigerator, a mini fridge and a tea/coffee station. An ironing set is provided for guests' convenience. Other features include a telephone, a TV, a radio, an alarm clock and WiFi. Bathrooms are equipped with a shower and a bathtub, as well as a hairdryer.
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
Dining facilities include a restaurant, a dining room, a breakfast room, a café and a bar. Bed and breakfast is offered as a catering option. A continental breakfast guarantees a great start to the day.
FLORENCE
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Pullman Stuttgart Fontana
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This hotel is located about 1.2 km from the centre of Stuttgart.
Facilities
252 rooms are located on 14 storeys and can be reached by lift. The friendly staff at the reception desk are happy to answer any questions. Amenities available at the hotel include a baggage storage service and a safe. Wireless internet access (no extra charge) is provided in public areas. The hotel has wheelchair-accessible facilities. Children can enjoy the playground. Additional facilities include a library. Guests arriving by car can park their vehicles in the garage (for a fee) or in the car park (for a fee). Further services and facilities include a babysitting service (for a fee), a transfer service, room service (limited hours), a laundry service and a coin-operated laundry. A bicycle hire service gives guests the opportunity to explore the surrounding area independently. Complimentary newspapers are available.
Rooms
Air conditioning and central heating ensure that rooms maintain comfortable temperatures. Children's beds can be requested for younger guests. A safe, a minibar and a desk are also available. A refrigerator, a mini fridge and a tea/coffee station are standard features. An ironing set is provided for guests' convenience. A telephone, a television with satellite and pay-per-view channels, a radio and WiFi are provided as well. Slippers are included. A hairdryer and bathrobes are available in the bathrooms, which are equipped with a shower and a bathtub. For extra comfort in the bathrooms, guests are offered cosmetic products. Guests can also book wheelchair-friendly rooms with wheelchair-accessible bathrooms. The hotel has family rooms and non-smoking rooms.
Sports/Entertainment
The indoor pool complex is ideal for relaxation and exercise. Guests can treat themselves to refreshing drinks at the poolside snack bar and a relaxing soak in the hot tub. Comfortable sun loungers are available on the terrace. For those who wish to stay active while on holiday, the hotel offers cycling/mountain biking. After an eventful day, guests can work out and recharge in the gym. There is a wellness area with a spa, a sauna, a steam bath, a hammam and a beauty salon. Subject to charge: massage treatments. Parents can unwind while the kids can participate in an entertainment programme full of fun activities.
Meals
Various dining options are available, including a restaurant, a dining room, a breakfast room, a café and a bar. Half board is offered as a catering option. Breakfast and dinner are served every day.
Payment
The hotel accepts the following credit cards: American Express, VISA, Diners Club, JCB and MasterCard.
Danat Al Ain Resort
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This club resort is located 5 minutes' drive from the centre of Al Ain, also known as the Garden City, with its museums, oases, shops and cafés.
Facilities
216 rooms are available to guests at this hotel, which includes a lift and a reception desk. To ensure guests a comfortable and relaxing stay, the hotel provides various services and facilities, including a playroom, a babysitting service, room service, a conference room and a business centre. Wireless internet access allows guests to stay connected while on holiday. The hotel has wheelchair-accessible facilities. The grounds of the hotel feature a playground and a lovely garden. Guests arriving by car can park their vehicles in the car park.
Rooms
Rooms feature a kitchen and a bathroom, and air conditioning ensures just the right temperature. A balcony or terrace is among the standard amenities of some rooms. All rooms are carpeted and include a double bed. Extra beds can be requested. A safe and a minibar are also available. All kitchenettes come with a mini fridge and a tea/coffee station. An ironing set is provided for guests' convenience. A telephone, a television with satellite/cable channels and WiFi are provided as well. Slippers are included. A hairdryer and bathrobes are available in the bathrooms, which are equipped with a shower and a bathtub. The hotel has 70 non-smoking rooms.
Sports/Entertainment
The outdoor pool complex includes a children's swimming area and is ideal for working out or just relaxing. Refreshing drinks at the pool bar and a relaxing soak in the hot tub offer the perfect way to unwind. For guests who wish to keep active, tennis, crazy golf and golf are available. Sport and leisure facilities at the hotel include a gym and squash. There is a wellness area with a spa, a sauna and a steam bath. Subject to charge: massage treatments. Additional leisure activities include a kids' club, a dance club and a nightclub.
Meals
Various dining options are available, including a restaurant, a dining room, a breakfast room and a bar. Catering options include half board and full board. Breakfast, a lunch buffet and dinner offer plenty of delicious variety.
Payment
The hotel accepts the following credit cards: American Express, VISA, Diners Club and MasterCard.
Schlosshotel Bühlerhöhe
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Walking enthusiasts are offered an inexhaustible array of wonderful walking tours in this hotel' surrounds, with the hotel providing an ideal base from whence to embark on trips to nearby Alsace, Baden-Baden and Heidelberg as well as the surrounding wine country, with its renowned wine-growing villages. The centre of Baden-Baden with its many shopping venues is 20 km away.
Facilities
The hotel was built in 1911. 2 junior suites, 13 suites, 12 single rooms and 63 double rooms are located on 5 storeys and can be reached by lift. The friendly staff at the reception desk in the lobby are happy to answer any questions. Amenities include a cloakroom, a safe and a currency exchange service. Wireless internet access (for a fee) allows guests to stay connected while on holiday. A fireplace creates a cosy atmosphere. There are also a number of shops that make for great strolling and browsing. A garden provides extra space for rest and relaxation in the open air. Additional amenities include a newspaper stand and a library. Guests arriving by car can park their vehicles in the garage or in the car park. Further services and facilities include medical assistance, room service (for a fee), a laundry service, a hairdresser and a coin-operated laundry. A bicycle hire service gives guests the opportunity to explore the surrounding area independently.
Rooms
Rooms are equipped with central heating. Some rooms include a balcony. All rooms are carpeted and include a double bed or a king-size bed. A safe, a minibar and a desk are also available. An ironing set is provided for guests' convenience. A direct dial telephone, a television with satellite/cable channels, a radio and WiFi are provided as well. Bathrooms are equipped with a shower, a bathtub and a bidet. A hairdryer and bathrobes are available for daily use. The hotel has non-smoking rooms.
Sports/Entertainment
Excellent swimming awaits guests at the indoor pool. Refreshing drinks at the pool bar and a relaxing soak in the hot tub offer the perfect way to unwind. Parasols on the terrace are also available. The hotel offers outdoor sports, including tennis, golf and horse riding or, for a fee, cycling/mountain biking. The fitness rooms are perfect for a comprehensive workout. There is a wellness area with a spa, a sauna, a steam bath, massage treatments, thalassotherapy treatments and a solarium. Subject to charge: a beauty salon.
Meals
Various dining options are available, including a dining room, a breakfast 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 generous breakfast buffet guarantees a great start to the day. At lunch and dinner, guests can choose between à la carte and a set menu.
Payment
The following credit cards are accepted: American Express, VISA, Diners Club, JCB and MasterCard.
The Hotel Captain Cook
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This hotel is located in the heart of Anchorage.
Facilities
The hotel has 546 rooms. To ensure guests a comfortable and relaxing stay, the hotel provides various services and facilities, including translation services, room service, a conference room and a business centre. Wireless internet access is provided in public areas. Wheelchair-accessible facilities are available. Guests arriving by car can park their vehicles in the car park. A bicycle hire service provides all the necessary equipment for exploring the surrounding area.
Rooms
Rooms feature a living room, a kitchen and a bathroom. Air conditioning and a fan ensure comfortable temperatures. Separate bedrooms can be booked. Children's beds and extra beds can be requested for younger guests. A desk is provided. A refrigerator and a tea/coffee station are standard features. An ironing set is provided for guests' convenience. A telephone, a flatscreen television with cable and pay-per-view channels and WiFi are provided as well. A hairdryer and bathrobes are available in the bathrooms, which are equipped with a shower. The hotel has 547 non-smoking rooms.
Sports/Entertainment
A refreshing swim in the indoor pool complex is a great way to unwind. Those who would like to stay active while on holiday can make use of the on-site facilities, including a gym, squash, aerobics and a spa or, for a fee, cycling/mountain biking and kayaking. In addition, golf is offered by third-party operators.
Meals
Various dining options are available, including a restaurant, a dining room and a bar.
Payment
The following credit cards are accepted at the hotel: VISA, AMEXCO, Diners Club and MasterCard.
Americas Best Value Inn - Antioch / Bay Area
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This hotel is located in Antioch. The nearest airport is Oakland - Metropolitan Int. (OAK).
Facilities
Guests of the hotel can enjoy a variety of facilities, services and amenities during their stay. Guests have a choice of 47 rooms. Parking spaces are available to guests travelling by car.
Rooms
Accommodation includes a range of amenities as standard. The hotel has non-smoking rooms.
Meals
Bed and breakfast can be booked.
Hampton Inn San Diego-Kearny Mesa
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This hotel is located in the centre of San Diego.
Facilities
Guests can enjoy the pleasant ambience of one of the 147 non-smoking rooms. Services and facilities include a conference room and a business centre. Guests arriving by car can park their vehicles in the car park.
Rooms
Rooms are equipped with air conditioning. The rooms have a double bed and a sofa bed. Children's beds can be requested for younger guests. A desk is provided. A refrigerator and a tea/coffee station are standard features. A flatscreen television and WiFi ensure optimal comfort. A hairdryer is available in the bathrooms.
Sports/Entertainment
Sport and leisure activities are offered by the hotel and third-party operators. The outdoor pool complex is ideal for exercise and relaxation. Guests can unwind in the on-site hot tub. After an eventful day, guests can work out and recharge in the gym.
Meals
Bed and breakfast is offered as a catering option. A generous breakfast buffet guarantees a great start to the day.
Quality Inn Near Hollywood Walk of Fame
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The hotel is located in Los Angeles, California.
Facilities
The hotel has a reception desk and features 52 rooms. Valuables can be stored safely and conveniently in the safe. Wireless internet access is provided to guests. Guests arriving by car can park their vehicles in the car park.
Rooms
Rooms are equipped with air conditioning. Some rooms have a balcony, which gives guests additional space for rest and relaxation. Additional features include a refrigerator, a mini fridge, a microwave and a tea/coffee station. An ironing set is provided for guests' convenience. Other features include a telephone, a television with satellite/cable channels and WiFi. Bathrooms are equipped with a shower and a hairdryer. The hotel has 1 non-smoking room.
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 provides invigorating refreshment. A sun terrace is a great place to while away the hours.
Meals
There is a breakfast room on the premises. Bed and breakfast can be booked. A continental breakfast guarantees a great start to the day.
Holiday Inn Express Derby Pride Park
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This city hotel is a 10-minute walk from Derby city centre and Derby train station, and various reastaurants and shopping venues are also within easy walking distance. It is also around 20 km from East Midlands Airport.
Facilities
103 double rooms are located on 4 storeys and can be reached by lift. Staffed 24 hours a day, the reception desk provides a smooth check-in/check-out service. The hotel provides a cloakroom, a safe, a TV room, a laundry service, a conference room and a business centre. Wireless internet access allows guests to stay connected while on holiday. The hotel has wheelchair-accessible facilities. Guests arriving by car can park their vehicles in the car park.
Rooms
Air conditioning and central heating ensure that rooms maintain comfortable temperatures. The rooms have a double bed and a sofa bed. Guests will also find a tea/coffee station included among the standard features. Equipped with a direct dial telephone, a television with satellite/cable channels, a radio and WiFi, the rooms provide many ways for guests to stay connected and entertained. Bathrooms are equipped with a shower and a hairdryer. Guests can also book wheelchair-friendly rooms with wheelchair-accessible bathrooms. The hotel has 103 non-smoking rooms.
Sports/Entertainment
After an eventful day, guests can work out and recharge in the gym.
Meals
A restaurant (with high chairs), a breakfast room and a bar are available to guests. Bed and breakfast can be booked. A continental breakfast guarantees a great start to the day.
Payment
The hotel accepts the following credit cards: American Express, VISA, Diners Club, JCB and MasterCard.
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