As you learn the travel industry, you’ll hear terms like commissionable rate and net rate. Understanding the difference is important because it affects how travel advisors earn revenue and price travel products.
While many travel advisors book commissionable rates through suppliers, there are times when you’ll encounter net rates instead.
What Is a Net Rate?
A net rate is a price provided by a travel supplier that does not include a travel advisor commission.
Instead, it’s a lower wholesale price that allows the travel advisor to determine how they will earn revenue on the booking.
For example, if a hotel offers a room with a net rate of $200 per night, the travel advisor may add a markup or charge a separate planning or professional service fee, depending on their business model and the supplier’s policies.
Unlike a commissionable rate, the supplier is not automatically paying the advisor a commission.
Net Rate vs. Commissionable Rate
The primary difference is how the travel advisor is compensated.
With a commissionable rate, the supplier pays the advisor a commission based on its commission policy.
With a net rate, the advisor earns income through an approved markup, a planning fee, or another permitted pricing model.
Every supplier has its own policies, so it’s important to understand how each one structures pricing and advisor compensation.
When Will You Encounter Net Rates?
Net rates are commonly found with:
- Tour operators.
- Destination management companies (DMCs).
- Wholesale travel companies.
- Some hotel wholesalers.
- Certain group travel programs.
- Select international travel suppliers.
Many cruise lines and major vacation suppliers primarily offer commissionable rates, but every supplier operates differently.
Why Understanding Net Rates Matters
Knowing whether you’re booking a commissionable or net rate helps you:
- Understand how you’ll be paid.
- Price travel accurately.
- Communicate pricing clearly with clients.
- Compare supplier offerings.
- Build a profitable business.
Before selling any travel product, always review the supplier’s policies regarding pricing, commissions, and any rules governing markups or service fees.
How Careers on Vacation® Helps Students Understand Travel Pricing
At Wanderlust Campus, Careers on Vacation® students learn much more than how to book vacations.
Throughout the comprehensive 12-week certification program and business mastermind, students gain a solid understanding of supplier relationships, pricing models, commissions, and the business side of selling travel.
Understanding concepts like net rates helps new advisors make informed decisions and confidently grow their travel business.
Build Your Industry Knowledge
The travel industry has its own language, and learning terms like net rate is part of becoming a knowledgeable travel professional.
The more you understand how suppliers price their products and how travel advisors are compensated, the more confident you’ll be serving clients and building a successful business.
