Analysis

What a 20% commission really costs a twelve-property portfolio

We ran the numbers over five years. The headline percentage is the smallest part of it.

Published 2026-08-18

The arithmetic nobody does

Take a twelve-property collection turning over £420,000 a year, with seventy per cent of bookings arriving through agency channels at a typical UK rate of 18–22% including VAT⁴. Call it twenty per cent for the sake of round numbers.

That is £294,000 of agency-sourced revenue, and roughly £58,800 a year in commission. Over five years, ignoring growth entirely, £294,000 — the value of the entire agency channel for one year, handed over across five.

Now shift the mix. Move direct share from thirty per cent to fifty per cent and agency-sourced revenue falls to £210,000, with commission at £42,000. That is £16,800 back a year, £84,000 over five, from a change in mix rather than a change in occupancy.

The part that does not show up in the commission line

Commission is the visible cost. The invisible one is the guest relationship. An agency booking arrives without an email address you can use, which means the second stay has to be bought again at the same rate.

Industry data puts direct bookings at 45.2% longer average stays and 51.3% longer booking windows than OTA bookings². Longer stays mean fewer changeovers per occupied night, which is a direct saving on cleaning and linen. Longer booking windows mean better forecasting and less discounting into gaps.

None of that appears in a commission calculation, and all of it is real money.

What it would cost to change the mix

A properly built direct booking website for a twelve-property collection is a meaningful investment, and it is a one-off with a small ongoing cost. Against £16,800 a year in recovered commission, the payback period is short enough that the interesting question is not whether to do it but why it was not done three years ago.

The honest caveat: shifting twenty points of direct share is not automatic. It requires the website to be genuinely better than the agency listing, and it requires organic visibility that takes six to twelve months to build. Anyone promising it faster is guessing.

The counter-argument, fairly put

Agencies earn their commission. They fill shoulder-season weeks that would otherwise go empty, they handle guest communication, and they carry marketing spend you would otherwise carry yourself. For many owners, particularly those with one or two properties and no appetite for admin, the twenty per cent is good value.

The argument here is not to leave. It is that a channel taking a fifth of every booking deserves a competitor, and the only competitor available to you is your own website.