A negotiated rate (not to be confused with negotiated fare) in the travel industry refers to a special, discounted price at which a travel provider, such as a hotel or airline, agrees to sell its products to a corporate customer, wholesaler (e.g., bed bank or airline consolidator), or other resellers (e.g., travel agencies).
These rates are typically arranged through negotiations between the parties and benefit both sides: Customers get discount prices, while travel providers get more sales volume, thus increasing revenue.
For example, a hotel can offer a special net rate to an OTA that adds its markup and sells rooms to travelers (a so-called net contracted or merchant model). Or a company might negotiate a discounted rate with a hotel chain for their employees who frequently travel for business. This negotiated rate could be lower than the standard price offered to the general public (the rack rate), providing cost savings for the company and its employees.
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Nov 18, 2022
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