Net Rate vs Sell Rate
The Net Rate is the wholesale amount the hotel receives after distribution deductions, while the Sell Rate is the final public tariff displayed to the guest on the booking channel.
Why It Matters for Independent Operators
Misunderstanding merchant versus agency models causes margin leakage. Under merchant models, OTAs mark up the net rate; under agency models, the hotel sets the sell rate and pays a commission invoice post-stay.
Practical Scenario & Calculation
[Illustrative Scenario] For a ₹5,000 sell rate on an 18% agency model, the hotel earns a net rate of ₹4,100 while the OTA invoices ₹900.
How Operators Can Apply This Concept
Ensure channel managers are mapped with correct rate calculation logic (net vs gross) across all portals to prevent unexpected tariff dilution or commission discrepancies.
Common Misunderstanding to Avoid
Failing to reconcile GST treatment on net versus gross bookings can create unexpected tax liability for properties in India.
OTA Commission Loss Calculator
Estimate OTA fees from inventory, rates, occupancy and entered channel shares. Optional settlement deductions are inputs, not statutory tax advice.