Rising Hotel Rates Don’t Always

Mean Rising Commissions

It seems like common sense: higher booking rates should equal more commissions flowing in. But that isn’t necessarily the reality for hotels and travel management companies. Despite an increase in bookings, factors like rate fluctuations, cancellations, and discrepancies between booked and actual rooms can cause significant gaps in commission payments. Furthermore, reliance on Average Daily Rate (ADR) as a performance metric doesn’t always paint the full picture. 

In this article, we’ll explore why ADR is not a reliable indicator of commissions and how to obtain more accurate data for a clearer understanding of the overall market. By diving deeper into data analytics, including occupancy rates, booking trends, and payment reconciliation, businesses can gain a more comprehensive view of their financial performance. This approach ensures more accurate forecasting and helps businesses make better strategic decisions for long-term success.