Booking-site commission: what a booking really leaves you
Commission is the share of each booking a booking site keeps, at the rate in your contract with it. What a booking leaves you is the room's price, less any discount you gave on the site, less the commission, less the tax on that commission. The gap between that and the price the guest saw is what the same guest booking on your own website is worth to you.
The formulaPrice after discount, less commission and the tax on it
Also called: OTA commission, Booking.com commission, MakeMyTrip commission, hotel booking commission.
A OneHorizyn page. Updated .
What a booking site's booking leaves you
It opens on made-up figures. Put in your own; nothing you type leaves this page.
₹4,500 after the discount, less ₹851 commission on ₹4,725 and ₹153 tax on it: you keep 69.9% of the room's price, and the GST goes to the government
How commission works
A booking site lists your rooms, sends you the guest and keeps a share of the booking. Booking.com, for one, says its commission is a set share of the whole booking amount, the room and any fees you charge through it, applied once the guest checks out.
It is collected in one of two ways: the guest pays you and the site sends you an invoice for its commission, or the guest pays the site and the site pays you the price less its commission. Booking.com sends one invoice a month, for the guests who checked out in the month before, and says it must be paid within 14 days of being issued.
The rate is in your contract with each site, and each site's programmes can add to it. What each site says it charges, and what raises it, is in OneHorizyn's guide to booking-site commission, linked below.
What EHL Hospitality Business School says booking sites typically take in commission, as a share of the booking's value. Your own rate is in your contract with each site.
What a booking really leaves you, step by step
- 1Take the room's price without tax.
- 2Take off any discount you give on the site, such as a price for its members.
- 3Work out the site's commission, at your contract's rate plus any programme you are in, on the price it charges commission on. Booking.com says that in most countries this is the price with the GST in it; your contract with each site says which.
- 4Take the commission off the price after the discount, and then the tax on the commission, at the rate printed on the site's invoice. The GST in the price goes to the government, so none of it is yours to keep.
- 5What is left is what you keep. Compare it with the same room booked on your own website, after your booking engine's and payment charges.
A worked example
A room sells for ₹5,000 before tax on a booking site, with a 10% discount for the site's members, so the room's price is ₹4,500, and with GST taken here as 5% the guest pays ₹4,725. The site charges its commission, here 18%, on the price with GST: ₹851. The tax on the commission, taken here as 18%, is ₹153. The hotel keeps ₹4,500 less ₹851 and ₹153: ₹3,496, about 69.9% of the room's ₹5,000. Booked on the hotel's own website at ₹5,000, with booking engine and payment charges taken here as 4%, the same room leaves ₹4,800: ₹1,304 more. Across 100 such bookings in a month, that is ₹1.3 lakh.
The calculator on this page opens on the same booking. Use your own contract's rate and your invoice's tax.
What commission is charged on
The GST MakeMyTrip and Goibibo add to the commission they charge a hotel in India, as their partner help says: they pay it as an online travel aggregator, whatever the room's price. Check the tax line on each site's own invoice.
Each site's contract sets its own rules. Booking.com's, as it sets them out for partners:
- Stays the guest completed and paid for.
- Non-refundable and partly refundable bookings, whether or not the guest stays.
- Cancellation and no-show fees you charge the guest.
- Overbookings, since the room was on sale, though Booking.com waives it for a property live for less than 30 days or with fewer than five overbookings in the last 12 months.
- Not on local taxes such as a city tax. In most countries it is charged on the VAT or GST in the price, depending on local tax rules; your General Delivery Terms say what applies to you.
- Not on cancellation fees you choose to waive, no-shows you mark in the extranet within 48 hours of check-out and choose not to charge, or cards you mark as invalid.
What raises it, and what lowers what you keep
- Programmes. Booking.com says its Preferred Partner Programme and Visibility Booster add a percentage on top of your base commission.
- Discounts you give on the site, such as a member price: the guest pays less, and so do you.
- The tax on the commission, which the site adds to its invoice.
- Changes not marked in time. Booking.com says that if you don't mark a no-show or cancellation within 48 hours of check-out, it charges full commission on the original booking.
- Older rates. Booking.com says the commission rate is fixed when the guest books, so a change to your rate applies only to bookings made after it.
The discount Booking.com says applies automatically, for its Genius members, to a hotel's least expensive and most popular room type when the hotel joins its Genius programme.
What to do about it
- Know your rate on each site, and what a booking really leaves you after it.
- Mark no-shows, cancellations and changes in each site's back office straight after check-out.
- Check each month's statement against your bookings. Booking.com says you can dispute commission and ask for a credit note for reservations made within the last three months, in Reservation statements in the extranet.
- Weigh each programme's extra commission against the extra bookings it brought you, and leave the ones that don't pay.
- Check that no booking site sells your room for less than your own website. A guest who finds a lower price on a site books there, and you pay its commission.
- Give guests who already know your name a reason to book on your website: the same or a better price, and something a booking site can't offer.
