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Net rates, markups and where your margin actually comes from

By Priyanshu 8 min read Updated 2026-09-24

The short answer

A net rate is your cost with no commission inside it. You add a markup and quote one number. Typical markups on Indian leisure hotel bookings run 12% to 25% of the net, with groups usually lower per unit and honeymoon or luxury bookings higher. The number that decides your business is not the markup percentage, it is the gap between your net and the rate your client could find themselves.

The three rates on every hotel room

Rate	Who sees it	What it means to you
Published or rack rate	Everyone	The ceiling. Your client can find it
Public or OTA rate	Everyone	The real benchmark your quote is judged against
Net rate	The trade only	Your cost. Your margin lives in the gap above it

The arithmetic

Take a property where your net is Rs 9,000 per room per night and the public rate on the hotel's own site is Rs 14,000. A client booking four nights in two rooms is looking at Rs 1,12,000 if they book it themselves.

At a 20% markup you quote Rs 10,800 per room night, or Rs 86,400. The client saves Rs 25,600 against the public rate and you make Rs 14,400. Both sides win, which is the only kind of deal that repeats.

Now take the same booking with a net of Rs 12,500, which is what a thin aggregated rate on the same property might look like. At the same 20% markup you quote Rs 15,000, which is above the public rate. You have no product. You either cut your markup to 8% and make Rs 8,000, or you lose the booking.

That is the whole business in one example. The markup percentage barely moved. The sourcing decided the outcome.

Markup ranges that actually hold

Booking type	Typical markup on net	Why
FIT leisure, 2 to 4 nights	15% to 25%	Client is comparing against an OTA price they can see
Honeymoon and anniversary	20% to 30%	Emotional purchase, inclusions matter more than the rate
Corporate and business travel	8% to 15%	Procurement compares, and often has its own rates
Groups over 10 rooms	10% to 18%	Lower per unit, much larger absolute value
MICE and weddings	12% to 20%	More work, more risk, more components to earn on
Long stay, 7 nights or more	10% to 18%	Total value is large, a high percentage becomes visible

Worth knowing. Mark up on the total package, not line by line. A client who can see your hotel markup will argue about it. A client looking at one package price argues about the package.

Mistakes that cost new agencies money

Quoting a percentage rather than a number. Decide the rupees you need on the booking, then check what percentage that is
Forgetting GST is on top and having to add it after the client has mentally accepted a price
Ignoring the cancellation window. A non-refundable net with a flexible sell price means you carry the risk for free
Marking up transfers and activities at the same rate as hotels. Those usually carry more room
Not re-checking the net when the client shifts dates. Season bands move and the rate you quoted may no longer exist
Accepting the first net you are given. It is a starting position on almost every leisure property

When to walk away from a booking

If your net plus a minimum acceptable markup lands above what the client can find on a public site, the booking is not worth having. Taking it at a 3% margin teaches the client that you are a price channel and trains you to work for nothing.

Tell them honestly that on this property, for these dates, they are better off booking direct, and offer an alternative where you do have a rate. Agents who do this get called back. The ones who quote anything to stay in the conversation do not.

Where your hotel rates could come from

Rezort.in contracts 912 hotels and resorts directly across 30 Indian states and sells them to the trade at net rates. Verification takes about three minutes and needs a GST number, not a booking history. Send us a rate you are already holding and we will tell you honestly whether we improve on it.

Apply for trade access Trade only. No joining fee, no subscription, no minimum volume. We never sell to consumers.

Frequently asked

What is a good markup on a hotel booking in India?

15% to 25% on the net for FIT leisure bookings is typical. Corporate travel runs lower at 8% to 15% and groups run lower per unit but on much larger totals. The right number is whatever keeps your quote meaningfully below the public rate.

Should I show my client the net rate?

No. A net rate is confidential under most supplier contracts, and showing it turns the conversation into a negotiation about your margin rather than about the trip.

How do I know if my net rate is competitive?

Compare it against the public rate on the hotel's own website for the same dates, same room, same meal plan. If the gap is not meaningful, the rate is not competitive whatever it is labelled.

Is GST charged on my markup or on the total?

It depends on your model. Under the 5% tour operator scheme GST applies to the gross package value with no input tax credit. Under the 18% scheme it applies with credit available. Acting as a pure agent, GST applies to your commission.