{"id":22631,"date":"2020-04-10T17:27:04","date_gmt":"2020-04-10T17:27:04","guid":{"rendered":"https:\/\/www.xotels.com\/uncategorized\/net-rate\/"},"modified":"2024-12-23T09:21:19","modified_gmt":"2024-12-23T09:21:19","slug":"net-rate","status":"publish","type":"post","link":"https:\/\/www.xotels.com\/en\/glossary\/net-rate","title":{"rendered":"Net Rate"},"content":{"rendered":"<p>What is the meaning \/ definition of Net Rate in the <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/hospitality-industry\">hospitality industry<\/a>?<\/p>\n<p>In hotel distribution we work with many rate levels. <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/room-inventory\">Room inventory<\/a> is sold via some third party distributors at prices that are subject to <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/commission\">commission<\/a>. Others negotiate a (sometimes lower) price with the <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/hotel\">hotel<\/a> that does not include a commissions. Such a rate is called a <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/net-rate\">Net Rate<\/a>.<\/p>\n<p>The <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/net-rate\">Net Rate<\/a> is the price without the commission of the <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/travel-agent\">travel agent<\/a>. The distributor can <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/markup\">mark-up<\/a> this price with the <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/margin\">margin<\/a> he wishes to make, or an amount which is contractually agreed. Hotel distribution partners which typically work with net room rates are:<\/p>\n<ul>\n<li>Merchant Model OTA<\/li>\n<li>Wholesalers<\/li>\n<li>Tour Operators<\/li>\n<li>FIT companies (aka Foreign Incoming Travel)<\/li>\n<li>DMC\u2019s \u2013 Destination Management Companies<\/li>\n<li>Group bookers<\/li>\n<\/ul>\n<p>From a <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/hotel-revenue-management\">hotel revenue management<\/a> perspective you can also calculate a NetRate when subtracting the commission from a gross or <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/sell-rate\">sell rate<\/a>. For instance if the rate paid was $100 (excl VAT) and the <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/commission\">commission<\/a> is 25%, the Net Rate would be $75. And with a commission opf 15% the Net Rate would be $85.<\/p>\n<p>These kind of calculations are used to determine the real revenue contribution distribution <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/channels\">channels<\/a>. As well as a useful <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/kpi-key-performance-indicators\">KPI<\/a> called <a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/nrevpar\">NREVPAR<\/a>.<\/p>\n<p><strong>See also:<\/strong><\/p>\n<ul>\n<li><a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/negotiated-rate\">Negotiated Rate<\/a><\/li>\n<li><a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/fenced-rate\">Fenced Rate<\/a><\/li>\n<li><a class=\"glossary-only-link\" href=\"https:\/\/www.xotels.com\/en\/glossary\/rack-rate\">Rack Rate<\/a><\/li>\n<\/ul>\n<p><strong>Synonyms<\/strong><\/p>\n<ul>\n<li>Net Rate<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>What is the meaning \/ definition of Net Rate in  [&#8230;]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[9,44],"tags":[],"class_list":["post-22631","post","type-post","status-publish","format-standard","hentry","category-glossary","category-n"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Net Rate Definition \/ Meaning - Xotels<\/title>\n<meta name=\"description\" content=\"Definition: Some distributors negotiate a (sometimes lower) price with the hotel that does not include a commissions. Such a rate is called a Net Rate.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.xotels.com\/en\/glossary\/net-rate\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Net Rate Definition \/ Meaning - Xotels\" \/>\n<meta property=\"og:description\" content=\"Definition: Some distributors negotiate a (sometimes lower) price with the hotel that does not include a commissions. 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