If you sell travel, 'net rate' is one of the most important terms to understand — it's the foundation of your margin. Here's a plain-English explanation of net rates and how they compare to other pricing models.
Net rates, defined
A net rate is the wholesale price a supplier charges a trade partner, with no commission built in. You add your own markup on top and the difference is your profit. Net rates are usually lower than the public 'published' price, which is what makes B2B selling profitable.
Net rates vs commissionable rates
- Commissionable rate — you sell at the published price and the supplier pays you a fixed commission (say 10%). Your margin is capped.
- Net rate — you buy low and set your own sell price. Your margin is whatever the market allows, and you stay in control.
A worked example
Say a hotel's published rate is $200/night. On a commissionable model at 10% you'd earn $20. On a net rate of $150, you could sell at $190 (still below public price) and earn $40 — double the margin, and a better deal for your client. That's the power of net pricing.
Why net rates grow margins
Net rates let you compete on price and protect profit, bundle products with healthier margins, and avoid being boxed in by fixed commissions. The catch is access — net rates require trade relationships. A B2B platform like Tripovo gives you net rates across 950+ airlines and 1M+ hotels from one free account, so you only pay when your client books.