What is the meaning / definition of Commission in the hospitality industry?
Commission is a charge that a hotel pays to third parties (travel agents, OTAs) for selling their hotel rooms. It is usually a fix percentage of the room rate.
The commission ranges from 10% to 30% depending of the OTA (how influential it is), on the size of the hotel and also on the popularity of the destination.
Large hotel chains usually have more negotiation power.
The most common commission is 15%. It is also the average commission Bookings.com charges the hotels. In certain locations where the market is stronger, they have introduced a ‘preferred property’ scheme with a higher % for more exposure / a spot in the top 10 properties for that location.
Booking.com also works with a performance model, so that you pay higher comissions as a hotelier more visibility you get.