Net Rate vs Commissionable Rate: What Each One Means for Travel Agents

Net, Commissionable and Non-Commissionable Rates: Plain Definitions

Three questions sort every hotel rate: who sets the price the client pays, who takes the money from the client, and whether the supplier sends you anything afterwards. Each definition below answers them in a different way.

What does net rate mean in the hotel industry?

A net rate is the price a hotel gives the trade with no commission in it. The HSMAI Academy glossary describes it as the rate "excluding commission/taxes" that travel agents, wholesalers and OTAs expect from hotels, and notes that these channels add their markup before advertising it to customers. You'll also see it spelt "nett".

Two things follow. A net rate is confidential, so you never show it to a client on its own. And whether taxes sit inside it varies: many portal rates include them, many direct contracts don't. Read the rate line before you build a quote on it.

What is a commissionable rate?

A commissionable rate is a price the hotel sets, which you sell unchanged, in return for a percentage of it. HSMAI puts the catch plainly: the agent must charge the retail price set by the hotel, so there is no room to discount or bundle when demand is high. The big chains define the term broadly. Marriott says all published rates and packages available to the general public, with no qualification required, are commissionable.

What does commissionable rate mean at Marriott and Hilton?

At both chains it means the public rates anyone can book, paid at a fixed percentage once the stay has happened. The detail differs, and it decides what lands in your account.

Checked November 2026. Sources: Marriott travel agent commissions policy; Hilton transient commissions. Chain policies change and single hotels can differ, so check before you quote.

What does non-commissionable rate mean?

A non-commissionable rate is a price, or a slice of one, on which the supplier pays you nothing. The American Society of Travel Advisors (ASTA) defines a non-commissionable fare as a portion of the published price of a product that the supplier designates as paying the advisor no commission.

In hotels it turns up in two forms. Some rates pay nothing at all: the May 2026 ASTA industry brief names net and corporate rates, which are often well below the published or rack rate. Other charges sit inside an otherwise commissionable booking and pay nothing, resort fees being the common one. So "net non-commissionable" on a rate sheet just means the price is your cost and no commission follows.

Rack rate, BAR, gross rate and sell rate

The rest of the vocabulary is shorter. Rate sheets mix these terms freely, so it helps to pin each one down.

Sources: HSMAI rack rate, HSMAI best available rate, AltexSoft rack rate, NightsBridge on STO rates.

"B2B rates" is the umbrella term for any trade price, net or commissionable; our guide to what B2B travel is covers that side. For the other abbreviations on a rate sheet, keep the travel industry glossary open.

Net Rate vs Commissionable Rate vs Rack Rate: Side-by-Side

The real difference between these rates is who carries the money and the risk, not the price itself. Read the table by row.

Checked November 2026. Built from the HSMAI Academy glossary, the ASTA NCF industry brief (May 2026), AltexSoft on agency and merchant models and the Marriott and Hilton policies above.

Rack rate vs net rate

The rack rate is the full published price of the room; a net rate is a confidential trade price, usually lower, that you mark up. The gap between them is where the margin of a net-rate agent lives. It isn't guaranteed, though. A flash sale on the hotel website can bring the public price close to your net for a few nights, so check the public price before you quote.

Are rack rates commissionable?

Usually, yes, when you book them through a channel that pays agents. Marriott and Hilton both treat their general public rates as commissionable, and the rack rate is a public rate. What they won't pay on is a booking without your agency identifier, a stay that didn't happen, or fees outside the room rate. The non-commissionable rates section of our commission guide covers the exceptions by sector.

The Same Room Sold Both Ways: a Worked Example

Illustrative numbers, not market rates. Say a beach resort sells a deluxe room publicly at USD 200 a night, plus a USD 25 nightly resort fee paid at the hotel. Your client wants three nights. You can book it at the commissionable public rate, or buy it from a net rate of USD 160 a night.

The net column earns double, and that's the line most portals lead with. The other half of the story sits in the bottom rows. On the net booking you are holding money from the client, you owe the supplier by a deadline, and a late cancellation is settled under whatever terms you agreed with the client. On the commissionable booking the hotel carries all of that and pays you less for it.

You also can't always price a net rate wherever you like. Mews, a hotel software company, describes rate leakage as net rates appearing publicly at or below the best available rate of the hotel, and hotels write markup limits into contracts to stop it (Mews, June 2026). Selling at or near the public price, as in the example, is the safe default.

Net rate vs sell rate

The sell rate is the price your client pays. On a net booking it's your net rate plus your markup; on a commissionable booking it is the price the hotel set. Mews gives the reverse formula, net rate = sell rate / (1 + markup), which is handy when a client shows you a price and you want to know what a supplier must have charged. How much markup to add is a separate question, and our B2B hotel markup strategy guide compares percentage, fixed-amount and tiered approaches.

Net rate vs gross rate

A gross rate has the commission inside it; a net rate doesn't. On a tour operator price list that shows both, gross is the price to the public and net is gross minus your commission, the amount you send the operator. On a hotel contract, "net" more often means a separately negotiated trade price rather than gross less 10%. If a rate sheet doesn't say which it is, ask before you quote.

What Is Usually Non-Commissionable

Taxes, mandatory fees and anything collected for a third party usually sit outside the commission base. The exact line is set by each supplier, so treat this table as the pattern, not the rule.

Checked November 2026. Sources: ASTA, The History, Economic Impact and Future of Non-Commissionable Fares (May 2026); Hilton transient commissions; IRAS, GST for hotels and F&B.

The hotel example in the ASTA brief shows what this does to a headline rate. A three-night stay totals USD 1,050, of which USD 150 is resort fees. Commission at 10% is paid on the USD 900 room rate only, so the agency gets USD 90: an effective 8.6%.

Cruise is where it bites hardest. The same brief puts the cut to effective commission on cruise sales at 20-25%, with around 30% at the high end. Our guide to non-commissionable rates and NCFs covers the cruise side and the lines that have dropped them.

Quoting all-in: the US fee rule

If you advertise hotel prices to consumers in the United States, the FTC Rule on Unfair or Deceptive Fees has applied since 12 May 2025. It covers travel agents and other third parties as well as hotels. The total price, including mandatory fees such as resort fees, has to be shown clearly; government charges can be left out of the headline figure but must be disclosed before payment (FTC FAQ). A commissionable rate quoted without its resort fee is a commission problem everywhere and a compliance problem in the US.

How Invoicing Differs Between Net and Commissionable Bookings

On a commissionable booking you rarely invoice the client for the room. On a net booking you always do, because you are the one selling it.

That last point is worth an hour with your accountant. In the UK, for example, the HMRC Tour Operators' Margin Scheme (TOMS) applies when a business sells travel as principal or undisclosed agent, and VAT is then accounted for on the margin; a disclosed agent earning a readily identifiable commission sits outside it (VAT Notice 709/5). Other countries have their own versions, and we can't advise on them.

When to Choose Net Rates and When to Choose Commissionable Rates

Choose net rates when you want to control the price and can carry the money. Choose commissionable rates when you'd rather the hotel held the risk.

Net rates tend to suit you if:

• you sell packages, where one price covers the hotel, transfers and tours;
• your clients pay you in full before they travel;
• you quote in the currency your client uses, with your margin already built in;
• you want to be paid before the stay rather than after it;
• you book a lot of independent hotels outside the big chains' agent programmes.

Commissionable rates tend to suit you if:

• the client wants to pay the hotel at the stay;
• you hold an IATA or TIDS number and book chain hotels through a GDS or a consortium;
• you have little working capital and can't hold supplier balances;
• the client will check your price against the hotel's own website, line by line.

Net isn't automatically better. A net rate can sit above a flash-sale price on the hotel website for a week, and you've taken on payment risk and admin that a commission never asked of you. Most agencies end up using both. If you contract hotels directly, our hotel contract template is a starting point for writing the rate basis down.

Red Flags in Net and Commissionable Rate Deals

Most disputes over rates start with something nobody wrote down. These are the six we'd check first.

1. A rate sheet that doesn't say "net" or "commissionable". Get it in writing before the first quote.
2. A "net" rate above the public price for the same room and dates. It happens. Compare before you add anything.
3. A commissionable booking made without your agency identifier. Chains pay against the number on the booking, not against your memory of it.
4. Fees payable at the hotel missing from your quote. They shrink the commission base and surprise the client.
5. A net contract with markup limits or a "do not sell below" clause you haven't read.
6. Client cancellation terms more generous than the terms the supplier gave you. On a net booking the gap comes out of your pocket.

How Rates Work on DMC Quote

Every rate on DMC Quote is a net rate. There's no commission on our hotels, airport transfers, attraction tickets or tours, and nothing to chase after the stay. You see the trade price, decide your selling price and invoice your client yourself, outside the portal. The one place the portal applies a markup for you is the AI package builder: one percentage from 0 to 50, applied to the whole package, which then produces a client quotation as a link or a PDF.

A few things to know before you price:

• Mandatory fees payable at the hotel, and remarks from the supplier, are shown before you pay, so they can go straight into your quote.
• The cancellation deadline you see is deliberately earlier than the one the supplier sets, and shown in Singapore time. Give your client an earlier one still.
• You pay from a prepaid wallet topped up by bank transfer. You can hold a booking and pay before its deadline; unpaid holds are released automatically.
• The voucher is issued by Travel DMC Group, not white-label, and its payment summary shows what you paid. Forwarded unread, it tells your client your net cost.
• Flights aren't on DMC Quote, and the supplier behind each rate isn't named.

One honest limit: if your client insists on paying the hotel at check-in, a prepaid net rate isn't the right fit for that booking. For a wider view of how our pricing works, see the B2B rates and pricing guide or browse the B2B hotel booking portal.

How to Register for Net Rates on DMC Quote

1. Fill in the free agent registration form with your company details. There's no joining fee, subscription or minimum volume.
2. Upload your business registration when asked. Our team reviews and approves the account; an IATA number is optional.
3. Top up your wallet by bank transfer.
4. Search 1.5M+ hotels in 190+ countries at net rates, put your markup into your own quote, and book.

The registration guide lists the documents by country. Register free →