Rates play a critical role in determining your profit margins. Regardless of your role in the travel industry, the rate types you work with matter a great deal. Unfortunately, there’s a lot of them and that can make it hard to remember the difference between each type. Fortunately, you’ve got this cheatsheet to reference any time you need to decide on what works best for your business model.
Your success can very well depend on which rates you use, how you combine them and how they’re delivered.
Use Cash when you are booking from a Net supplier, and collecting the payment from the customer outside of HSP.
Relevant for Net suppliers, the payment is processed via Client's payment gateway.
Relevant for Gross Suppliers, Credit Card details are passed to the accommodation provider (Supplier).
Use PayUponArrival only when the PaymentPreferences response returns that type of payment (The costumer pays directly to the Hotel once arrived). This is NOT applicable payment option for Net suppliers, but only for Gross suppliers, such as Booking.com, HRS, Amadeus, etc.
Credit card field value affects the payment method that will be specified for the booking request.
(The available payment methods will also be returned in the ‘PaymentPreferences’ response).
(Default value) In this case, the payment method in the booking request will be ‘CreditCardExternal.’
Payment is to be made upon arrival at the hotel. Payment method sent in the booking request will be ‘PayUponArrival,’ credit card details will not be required.
Credit card details will be required, but no charges made. Payment will be made directly to the hotel upon arrival. In the case of a cancellation, payment will be made after cancellation policy's expiry. Payment method sent in the booking request will be ‘CreditCardExternal.’
Credit card details will be required, and the card will be charged for the value of [sum= FinalPrice - PayOnArrivalFinal]. Upon arrival at the hotel, ‘PayOnArrivalFinal’ amount is to be paid. Payment method sent in the booking request will be ‘CreditCardExternal,’ and in package details price section ‘PayOnArrivalFinal’ will be returned.
Pre-paid bookings involve paying for your room at the time of booking, often via an online platform or travel agency.
Post-paid hotel bookings allow you to reserve a room without immediate payment, with the payment being settled upon arrival or departure from the hotel.
A "commissionable rate" is when a customer books a hotel room at a commissionable rate through a third party, a percentage of the rate is paid as a commission to that intermediary. This arrangement is common in the travel industry, where travel agents and online booking platforms often rely on such commissions as part of their revenue model.
|Net Rate is the most common rate type in the industry.
It is sold by a company, after their own mark-up is added on top of the Net rate.
In this rate type, the OTA charges the customer for the full amount, which makes him the MOR (Merchant of Record).
The OTA would then pay the supplier for the Net amount.
|Gross Rate is a rate that includes a payable commission amount for the OTA.
It is sold by the OTA at the full price, which means that the OTA cannot add any mark-up on top of the Gross rate.
In this rate type, the supplier charges the customer’s credit card for the full amount, which makes him the MOR (Merchant of Record)
|OTA signs an agreement with the hotelier, getting ‘exclusive’ rates, which can be consumed through the GDS/Channel Managers.
|Closed User Group
These are discounted rates which are sold to ‘members-only’ groups.
Mainly promoted in OTAs’ websites as: ‘Hidden rate, click here to register and view’.
|Rates that are available to be sold through mobile apps/websites.
|Rates which are intended to be sold by travel agents, operating under a B2B booking engine.
Suppliers forbid selling B2B rates in B2C channels.
|Discounted rates, intended to be sold as part of a package. E.G Hotel + Flight package.
|Discounted rates are sold without a ‘supplier’ behind them.
Wholesalers usually buy these rates from other suppliers and sell them at a cheaper rate, without disclosing the source of the rate.
|Global Distribution System
Updated 11 days ago