Rack Rate(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.
Rack rates serve as the baseline for all pricing in the safari industry. Lodges publish rack rates on their websites and in their rate sheets, and these are the rates that direct-booking clients see. Tour operators rarely pay rack rate — they receive contracted net rates or earn a commission off the rack rate.
Understanding the relationship between rack rate and net rate is essential for operators to calculate their margins. An operator quoting rack rate to a client while paying net rate to the lodge captures the difference as margin.
How Ratiba helps
Ratiba's pricing engine lets operators store both rack and net rates, automatically calculating margins and ensuring quotes are profitable on every trip.
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.
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.
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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