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Travel & Tourism Industry Glossary  :  Net Rate

The rate at which a tour operator sells their tour or activity to a wholesaler or reseller.  This rate is also referred to as the wholesale rate.  Generally speaking this rate is anywhere between 30% and 40% less than the retail rate (a.k.a rack rate).  Tour operators who are interested in reselling their tours to wholesalers, retailers, or online travel agencies such as Expedia or Viator, should build in enough margin into their pricing in order to allow for net rate sales through these partners.

The discount provided to wholesalers should take into account costs that are offset by the wholesaler for example distribution, marketing, customer service,and payment processing.

Example of a net pricing calculation:

Retail rate of tour = $150 pp
Wholesale discount = 30% (or $50)
Net Rate = $100 pp

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