Markup
Markup is the percentage or fixed amount that a tour operator adds on top of the net (cost) rate to arrive at the selling price. It represents the operator's gross profit on each component of the trip.
Markup strategy varies across operators and components. Some operators apply a flat percentage markup (e.g., 25-35%) across all services, while others use different markups for accommodation, transport, and activities. Premium or hard-to-get lodges might carry a higher markup, while competitive routes might require lower margins.
Getting markup right is critical to profitability. Too high and the operator loses competitive bids; too low and they can't cover overheads. Operators need to see their margins clearly on every itinerary before sending a quote.
How Ratiba helps
Ratiba lets operators set default markup rules and override them per component — showing real-time margin calculations as they build each itinerary.
Related terms
Net Rate
A net rate is the discounted, trade-only price that a lodge or supplier offers to tour operators and DMCs. It is lower than the rack rate and is not visible to end clients.
Rack Rate
The rack rate is the published, full-price rate for an accommodation — before any trade discounts, commissions, or special offers are applied. It is the "retail" price that a walk-in guest or direct booker would pay.
Commission
Commission is the percentage of the selling price that a lodge or operator pays to a travel agent or referring partner for each booking. Standard safari industry commissions range from 10% to 20%.
Per Person Sharing
Per person sharing (pps) is the standard pricing format in the safari industry, quoting the nightly rate per guest based on two people sharing a room or tent. It is the default unit used in lodge rate sheets.
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