If you as a property owner wants to list your VR property on PMS or OTA channel, then the following commissions comes into play
- PMS Commission: This commission is for listing the property in a PMS (Eg: HomeAway, BookingPal, Airbnb etc). Listing your property in a PMS is an essential necessity to automate the availability and rate sync and to enable online booking.
- Channel Partner Commissions: This commissions is for distributing the listed property to the channels (Eg: Booking.com, Expedia.com). The same property can be listed in more than one channel.
- Credit Card Markup Fee: This is the usual service fee that needs to be paid when payment is supported via credit card and the commission is dependent on the selected payment gateway.
Wholesale vs. Markup
When it comes to merchant accounts, there are two types of fees: (1) wholesale fees, and (2) mark-ups. Keep in mind that while mark-up fees are negotiable, wholesale fees are non-negotiable
I’m using the term “wholesale” to help you picture the meaning behind this type of fee, but it can go by other names as well, like, “base fee” or “pre-mark-up” etc… Your wholesale fees are exactly as they sound: the wholesale cost of your sales transactions. These fees are determined by the credit card issuing bank and the credit card associations (Visa, MasterCard, etc.). They are consistent regardless of which provider you choose. In other words, don’t try to shop around for lower wholesale fees or rates from various credit card processors. It’s just not going to happen.
Mark-up fees are how your credit card processor is planning to make a profit from your business. With the right processor, these fees will be modest. With the wrong processor, fees could be way higher. What’s worse is that some processors make it as difficult as possible to know how much mark-up you’re paying by using bewildering terms and pricing models that would baffle even the most experienced business owner. Mark-up fees are differ from processor to processor. You should pay attention and compare them very well when preparing to open a new merchant account.
- PMS Markup: Similar to the Credit card mark-up fee, PMS mark-up fees are how PMS processor is planning to make a profit from your listing.
If property owner feels she needs to distribute her property to a channel then she needs to choose the PMS system which has the ability to distribute to that particular channel. On the other hand, if she is not much worried about the channels then she can choose the PMS system which suits her requirements. In reality, as a property owner, you need to balance between both PMS as well as the OTA channels to maximize your revenues.
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