Travel Agent Net Rate Calculator

Net rate vs commissionable rate

Hotels in India work with travel agents and tour operators in two main ways:

• Net (non-commissionable) rate: the hotel gives the agent a lower rate, usually a discount off BAR. The agent adds its own markup and sells to the guest. The hotel invoices the net rate and pays no commission.
• Commissionable rate: the guest pays the hotel's published rate, and the hotel pays the agent a commission percentage after the stay.

Both models reward the agent; what changes is who sets the final price and how much the hotel keeps.

Worked example

BAR ₹5,000, agent discount 20%: net rate ₹4,000. The agent adds 15% markup and sells the room for ₹4,600 a night. On a commissionable basis at 10%, the hotel would keep ₹4,500. Here the net rate deal earns the hotel ₹500 less per night, but it may bring volume the hotel would not otherwise get — for example group circuits or fixed departures.

GST on agent bookings

Room GST depends on the value the hotel charges per room per night: up to ₹7,500 is 5% without input tax credit; above ₹7,500 is 18% with ITC. Under the net model the hotel bills the net rate, so the slab is decided on that value. The agent charges GST on its own service according to its registration. Check the numbers with the hotel GST calculator and your CA.

Protect your rate parity

• Do not let net rates leak. If an agent sells the room alone below your website price, guests see a lower price online than on your own site. Contract terms should require net rates to be sold only in packages or with a minimum markup.
• Use allocations with release dates. Give agents a fixed number of rooms that return to general sale a set number of days before arrival.
• Review each agent yearly. Compare production with the discount given. Track distribution cost across channels with the OTA commission calculator and check market prices with the rate parity checker.

Frequently asked questions