Hotel Revenue Glossary · Segmentation

Travel Agency Commission

The fee paid by a hotel to a travel agency for each booking the agency generates. Traditional travel agency commissions are typically 10% of the room rate, paid after the guest completes their stay. Some hotels offer higher commissions as a booking incentive.

Why it matters: Travel agency commissions represent a distribution cost that affects NRevPAR. While lower than OTA commissions, agency bookings still reduce net revenue. Hotels that track commission costs by channel can make informed decisions about which distribution partners deliver the best net return.

Worked example: Sixty room nights this quarter come from a retail agency at A$240. Commission at 10% is A$1,440, so you bank A$12,960 — an effective A$216 a night. The same guest booking your website at A$220 nets A$220 less a 1.8% card fee of A$3.96, or A$216.04. The agency is costing you four cents a night, not A$24: the commission is only real money if the agency's rate is no higher than the direct rate it displaced.

Common mistake: Counting the commission as a loss without asking what the alternative booking was. Agency business that arrives at a rate above your direct rate can net more per night than the direct booking it supposedly cannibalised. The cost only bites when the agency books a guest who would have found you anyway.

All glossary terms Commission Structure Distribution Channel NRevPAR (Net Revenue Per Available Room)