Net Rate vs Gross Rate in Tourism: What OTA Operators Need to Know
Net rate and gross rate are the two pricing models you will meet in almost every distribution contract in tourism. Under a net rate, you set a wholesale price and the partner marks it up to create the price the traveller pays. Under a gross rate (the commission model), you set the retail price and the partner deducts its cut before paying you.
Most operators work with both at once without fully realising it. A wholesaler or tour operator contract quotes a net rate. A GetYourGuide listing works on commission. Since August 2026, Viator sits somewhere in between. Operators who type the same number into all three are often losing money without knowing it.
This article explains how each model works, shows how to convert between them, sets out which platforms use which approach, and covers what to check in your contracts before you sign.
Key Takeaways
- Net rate: you set a wholesale price and the partner marks it up. You receive the net rate per booking, whatever the traveller pays.
- Gross rate / commission model: you set the retail price and the partner deducts its commission. You receive what remains.
- A markup and a commission of the same percentage are not the same thing. A 25% commission equals a 33.3% markup on your net rate.
- Most OTAs, including GetYourGuide and Booking.com Attractions, use commission. Net rates are standard in wholesale and travel trade deals, and appear in some Klook contracts.
- Viator’s agreement since 1 August 2026 asks for a net rate plus a recommended retail price, and Viator can set the final price. In practice that behaves more like a net rate model.
What Is Net Rate in Tourism?
Net rate is the wholesale price an operator agrees with a distribution partner. The partner adds its own markup and sells at a higher consumer price. The operator receives the agreed net rate per booking, regardless of what the partner charges the traveller.
In practice: you agree a net rate of £75 per person with a wholesaler. The wholesaler decides what to charge, based on its own margin, market and promotions. The traveller might pay £95, £100 or £110. You receive £75 either way.
The operator does not control what the traveller pays. The partner does.
Where you will meet net rates: most wholesale and travel trade deals, tour operators and DMCs packaging your experience into itineraries, some Klook contracts, and now Viator’s August 2026 agreement. Verify current terms with each partner, as pricing models do change.
What Is Gross Rate in Tourism?
Gross rate is the consumer-facing retail price, sometimes called the rack rate. Under a commission model, the operator sets this price and the OTA takes a percentage of it as its distribution fee. The operator receives the gross rate minus commission.
In practice: you list your experience at £100 per person on GetYourGuide. At its 30% default commission, GetYourGuide keeps £30 and you receive £70.
The operator sets the retail price. The OTA takes its cut from that price.
Common commission-model platforms: GetYourGuide, Booking.com Attractions, Airbnb Experiences and most Klook contracts.
Net Rate vs Gross Rate: The Key Differences
| Factor | Net Rate Model | Gross Rate / Commission Model |
|---|---|---|
| Who sets the consumer price | The partner (marks up from your net rate) | The operator |
| What the operator receives | The net rate per booking, fixed in the contract | Retail price minus commission |
| Who can discount | The partner, from its own markup | The operator sets retail; parity terms limit undercutting |
| Rate parity obligation | Net rate parity: offer the partner the same or a better net rate than other partners | Retail parity: typically no lower price on your own online channels |
| Revenue predictability | Fixed per booking | Depends on the retail price you set |
| Markup transparency | The partner’s markup may not be disclosed | The commission percentage is explicit in the contract |
Markup vs Commission: How to Convert Between Them
This is where most pricing mistakes happen. A markup is calculated on the net rate. A commission is calculated on the retail price. The same percentage produces different numbers.
Two formulas cover every case:
- Gross rate from a net rate: gross = net ÷ (1 − commission rate). A £75 net rate at 25% commission needs a £100 gross rate (£75 ÷ 0.75).
- Net rate from a gross rate: net = gross × (1 − commission rate). A £100 gross rate at 30% commission leaves a £70 net rate.
The common mistake is adding the commission percentage as a markup. Take a £75 net rate and add 25%, and you get £93.75. A 25% commission on £93.75 is £23.44, so you receive £70.31, not £75. You have lost £4.69 on every booking without changing anything except the arithmetic.
| Commission rate | Equivalent markup on net | £75 net becomes |
|---|---|---|
| 15% | 17.6% | £88.24 |
| 20% | 25.0% | £93.75 |
| 25% | 33.3% | £100.00 |
| 30% | 42.9% | £107.14 |
If you want to see what this does to your profit once delivery costs come in, the true OTA margin calculation takes it a step further.
The Maths Behind Both Models
The two models can produce the same revenue per booking. They can also produce very different outcomes if you apply the same number to both.
Scenario 1: The same price on both channels (a common mistake)
A tour operator running walking tours in Edinburgh gives a wholesaler a £35 net rate and lists the same experience at £35 on GetYourGuide. On the surface the prices look the same.
- Wholesaler (net rate): the £35 is the net rate. The wholesaler sells it at whatever it chooses. The operator receives £35.
- GetYourGuide (30% commission): the £35 is the retail price. GetYourGuide keeps £10.50. The operator receives £24.50.
Same number, two different jobs. The operator is taking £10.50 less per GetYourGuide booking, not because GetYourGuide is expensive, but because the figure was never adjusted for the model.
Picture the reconciliation six months in. The average GetYourGuide booking is worth noticeably less than the identical wholesale booking, even though both show £35 in the operator’s own records. Nothing is wrong with either partner. The number was just doing two different jobs.
Scenario 2: Making both models produce the same revenue
If the operator wants £75 per booking from a £100 consumer price:
- Net rate partner: set £75 net. The partner adds a 33.3% markup to reach £100. The operator receives £75.
- 25% commission OTA: set £100 retail. The OTA keeps £25. The operator receives £75.
Both produce £75. The difference is control. The net rate partner can run a promotion and sell at £90. The operator still receives £75, but the experience is now on sale below the operator’s own direct price, without their approval. Under a commission model, the operator sets £100 and that is the starting price on the platform.
This is the practical difference between the two models. Not the revenue number. The control.
How Viator’s August 2026 Agreement Changes the Picture
Viator used to be the textbook commission platform: you set the retail price and Viator deducted its commission. Its updated supplier agreement, in force since 1 August 2026, changes that. You now supply a net rate and a recommended retail price. Viator and its channel partners (Skift names Booking.com, Expedia, Costco and Airbnb) can set the final retail price, including discounting it.
Your payout stays tied to your net rate, so your revenue per booking is protected. What you lose is control of the price travellers see, which is exactly the trade-off of a net rate model. Your £100 is now a recommendation. Viator treats continuing to use the platform as acceptance of these terms.
Two practical consequences:
- Price your Viator net rate deliberately. If you previously set a retail price and let commission come off it, work out the net rate you actually need, using the conversion above.
- Watch your direct price. A Viator partner can now sell your experience below your website price, and you may only find out by checking.
The Viator commission rate guide covers what Viator charges on top of this.
What This Means for Rate Parity
Rate parity clauses require consistent pricing across channels. The obligations work differently depending on the model.
Commission model parity: you typically agree not to offer a lower retail price on your own online channels than the price on the OTA. GetYourGuide’s terms impose this narrow parity, and it covers availability and conditions as well as price. If you list at £100 on GetYourGuide, you cannot offer £85 on your own website.
Net rate model parity: parity applies to the net rate, not the consumer price. You must offer the partner the same or a better net rate than you give other distribution partners. Because the partner controls the consumer price, you cannot guarantee that your direct price matches or undercuts it.
Read the specific parity clause in every contract before signing. Both kinds get called “rate parity”, but the obligations are materially different. Our guide to the three types of rate parity shows how to tell them apart.
What to Check in Your Contract
Before signing any distribution contract, identify which pricing model applies, then look for the following.
Net rate contracts:
- What markup range is the partner allowed to apply? Is there a floor on the consumer price?
- Can the partner require you to lower your net rate to fund its promotions?
- What does the net rate parity clause cover, and which partners does it include?
Commission contracts:
- Is commission calculated on the total booking value including taxes and fees, or on the net amount?
- Does the parity clause apply to your direct price, other OTA prices, or both?
- Are there carve-outs for phone bookings, loyalty programmes or email-only offers?
Operators who sign without reading the parity terms sometimes discover, months later, that they cannot price lower on their own website, or that a partner promotion has been running below their direct price. Neither outcome is unusual. Both are avoidable.
How these pricing models sit inside the wider choice between merchant and agency models, and how the main OTA commission models compare, is covered in separate guides.
Frequently Asked Questions
Is net rate the same as wholesale rate?
Yes, in most tourism contracts the terms are interchangeable. Both mean the price the operator receives per booking, before the partner adds its markup.
Is gross rate the same as rack rate?
Broadly, yes. Rack rate is the published retail price for an experience. Under a commission model, the rack rate you list is the gross rate the commission is taken from.
Does GetYourGuide use net rates or commission?
GetYourGuide uses commission: 25 to 30% of the retail price you set, with 30% the default for new suppliers. The GetYourGuide commission guide covers the full cost.
Does Viator use net rates or gross rates?
Both, in effect. Since 1 August 2026, you supply a net rate and a recommended retail price. Your payout is tied to the net rate, and Viator and its partners can set the final price.
Which model is better for operators?
Neither is better in itself. Net rates protect your revenue per booking and give up control of the consumer price. Commission keeps you in control of the price and makes your revenue depend on it. What matters is pricing each channel for the model it actually uses.
Reading Your Existing Contracts Against These Models
Net rate and gross rate are not fundamentally different economics. They are two contract structures that can arrive at the same revenue per booking. The real distinction is who controls the consumer price, who can discount it, and what your parity obligations are as a result.
The operators who lose money are rarely the ones who chose the wrong model. They are the ones who applied the same number across both without adjusting for which model was in play.
Pull out your current contracts. Mark each one as net rate or commission, and remember that Viator moved on 1 August 2026. Then check your pricing on each channel against the conversion table above. If you have been entering the same number everywhere, the gap will already be visible in your booking data.
7 Comments