What is a markup in travel? How agents price net rates

A markup in travel is the amount an agency adds to a supplier's net rate to set the price the traveler pays. No commission is payable on net rates, so the markup is what the agency earns on that booking. Supplier contracts and price display rules decide how you can apply it.

Commission is paid to you. A markup is priced in by you. Here is how markups work and how to calculate markup and margin. You also get a worked package example, the rules for hotels, air, cruise and tours, and how markups compare with commission and service fees.

What is a markup in travel?

A markup is the difference between the selling price of a good or service and its cost, expressed as a percentage above the cost. In travel, the cost is the supplier's net rate.

A net rate is a price with no commission built in. Booking.com's affiliate documentation calls net rates non-commissionable, prepaid prices made available to Affiliate partners. The American Society of Travel Advisors (ASTA) says hotels negotiate such rates in some contracts, and that they are often significantly lower than published or "rack" room rates. For the full definition, see what is a net rate.

How does a travel markup work?

The supplier sets the floor. You set the price above it.

1. The supplier quotes a net rate. This is what you owe the supplier.
2. You add your markup. Net rate plus markup is the selling price.
3. The traveler pays you the selling price. You pay the supplier the net rate and keep the difference.

Airline negotiated fares work the same way. Travelport's documentation for Category 35 (negotiated) fares lists three levels: the net amount remitted to the carrier, the selling fare level, and the gross or ticketed fare level. The selling fare is the amount a passenger pays the agency (or consolidator).

Markup vs margin: how do you calculate them?

Both measure the same dollars against a different base. Markup divides your profit by the cost. Margin divides it by the selling price.

• Markup % = (selling price minus net rate) ÷ net rate.
• Margin % = (selling price minus net rate) ÷ selling price.

On a product that sells for $125 and costs $100, the markup is 25% and the gross margin is 20%. The markup is always the larger number, as long as you charge more than what the product costs.

Illustrative example. The amounts are assumptions, not typical or recommended markups. A hotel stay has a net rate of $800.

To hit a target margin, divide the net rate by (1 minus the margin). A 25% margin on $800 needs a price of $800 ÷ 0.75 = $1,066.67. That is a 33.3% markup. Gross profit here is before card processing costs and any host agency split.

Worked example: pricing a package with a markup

This is illustrative arithmetic. Every amount is an assumption, not a typical or recommended markup.

A couple books a hotel and a guided tour from you, plus your planning.

Your gross profit is $410, a 25.5% margin on the $1,610 price. Costs still come out of it. Alaska & Yukon Tours, for one, says we have a 2% credit card fee on all mark-ups, so its $100 tour markup would carry a $2 fee under those terms.

The quote you show is one total of $1,610, or $1,460 plus a clearly disclosed $150 fee. The markups sit inside the item prices.

How to apply a markup in practice

This is practical guidance, built on the supplier terms and rules in this article.

1. Confirm the rate is net. Check that the supplier pays no commission on it. Alaska & Yukon Tours states Commissions are NOT paid on NET products.
2. Read the resale terms. Look for display limits (a closed user group), minimum or maximum prices, and card rules.
3. Set the markup from a target margin. Divide the net rate by (1 minus your target margin), then check the result against the public price.
4. Quote one all-in price per item. Taxes and mandatory fees go in the total, not on a later screen.
5. Collect and pay. Take the traveler's payment, then pay the supplier the net amount by its deadline. On net-only bookings, Alaska & Yukon Tours charges an agency credit card, not the client's.
6. Record the markup as agency revenue. Track it separately from commission, which arrives later.

When are markups allowed?

No single rule allows or bans markups. Two things decide it: your supplier's terms and the price display rules for what you sell. This is a summary, not legal advice.

Supplier terms. Read the contract before you price.

• Booking.com tells affiliates they are free to apply your own markup or discounts on net rates. Those rates must be distributed and displayed in a Closed User Group (CUG) or opaque environment.
• Emerging Travel Group can send selling price limits. When it does, you must not sell the selected rate at a price lower than min_price or higher than max_price.
• For airline negotiated fares, Travelport describes a secondary seller as an entity authorized to markup a fare amount and/or redistribute the fare. The right comes from the carrier.

Airfare: show the full price. Under US Department of Transportation (DOT) rules, an advertised airfare must be the entire price to be paid by the customer. That covers a hotel stay that must be bought with the flight too. Your markup sits inside that price.

Lodging: show the total price. The Federal Trade Commission's (FTC) fee rule, 16 CFR Part 464, requires businesses that show a lodging price to disclose the total price more prominently than any other pricing information. The FTC says it covers third-party platforms, resellers, and travel agents. It also bars misrepresenting the nature, purpose, amount, or refundability of any fee or charge.

Our reading, not a ruling: build the markup into the price you show. Don't add it at checkout or label it as a tax or resort fee.

How markup rules differ by product

Each row comes from a public supplier page or rule, checked October 2026. Your own contracts may differ.

Cruise lines mostly pay commission on a fare they publish. That is why cruise pricing questions usually turn on discounts and rebates, not markups. See what is an NCF for the non-commissionable part of a cruise fare.

Edge cases: refunds, price limits and public prices

• Refunds on air. When a ticket agent is the merchant of record and a refund is due, DOT requires a refund of airfare (including any taxes and ancillary fees). An agent may keep a separate service fee only if it is per passenger and disclosed at purchase. Our reading: a markup built into the fare is part of the airfare, so plan to refund it.
• Price limits. If a supplier sends a minimum and maximum price, your markup must land between them.
• Public display. Booking.com net rates belong in a closed user group or opaque environment. Posting a marked-up net rate on an open web page can breach those terms.
• Host agency rules. If you're hosted, ask whether net bookings go through the host and how its split applies to markup.

Markup vs commission vs service fee

All three pay the agency. They differ in who pays and when.

For commission timing, see supplier commission explained. For fee models, see travel agent service fees.

When to use a fee instead of a markup. A markup pays you for a net-rate product. A service fee pays you for your time, whatever the traveler books. For air, a disclosed per-passenger service fee is the one DOT lets an agent retain after a refund, under its conditions. Many advisors use both: markup on net components, a fee for the planning.

Why markups matter to travel advisors

This is practical guidance, not a sourced rule.

• You set the earnings. On a net rate, the supplier pays you nothing. Your markup is the whole return.
• Stay near the public price. Booking.com advises affiliates to ensure that your final selling price does not significantly exceed the best_available_price. Travelers compare.
• Price in your costs. Card fees and any host split come out of the markup. Check the margin too.

Common markup mistakes

• Confusing markup with margin. A 25% markup is a 20% margin. Price from the margin you need.
• Marking up a commissionable rate by accident. If the supplier already pays commission, your price may sit above the public rate for no extra service.
• Adding the markup at checkout. US airfare and lodging rules require the full price up front.
• Forgetting refunds. Decide before you sell what happens to your markup if the trip is cancelled, and write it into your terms.
• Ignoring the supplier's rules. Price limits, display limits and anti-rebating clauses all apply to your markup.

Related terms

• What is a net rate?
• What is an NCF (non-commissionable fare)?
• Travel agent service fees
• Supplier commission
• What is a preferred supplier?
• What is an override commission?
• What is an agent rate?: a supplier discount for your own travel, not a resale price

Sources

1. American Society of Travel Advisors (ASTA). The history, economic impact and future of non-commissionable fares (NCFs) in the travel industry, May 2026.
2. Booking.com for Developers. Integrating TPI Net rates, accessed October 2026.
3. Emerging Travel Group. sell_price_limits, API V3 documentation, accessed October 2026.
4. Travelport. Cat35: Negotiated Fares, accessed October 2026.
5. Corporate Finance Institute. Markup, published September 1, 2019.
6. US DOT. 14 CFR 399.84, Price advertising and opt-out provisions, eCFR text as of October 1, 2026.
7. Federal Trade Commission. 16 CFR Part 464, Rule on Unfair or Deceptive Fees, eCFR text as of October 1, 2026.
8. Federal Trade Commission. Rule on Unfair or Deceptive Fees: Frequently Asked Questions, May 2025.
9. US DOT. 14 CFR 399.80, Unfair and deceptive practices of ticket agents, eCFR text as of October 1, 2026.
10. Aman at Sea. Trade Policy, September 2026, covering May 1, 2027 to December 31, 2028.
11. Alaska & Yukon Tours (vendor). Agency registration and agent terms, accessed October 2026.