All about price, commission and binding prices

Overview

In each API search response, we detail the available options, including the following information among other fields:

{
    "price": {
        “currency” : “USD”,
        “binding” : true,
        “net” : 150
        “gross” : 170,
        “exchange” : {
        “currency” : “USD”,
        “rate” : 1
        },
    “minimumSellingPrice” : 160,
    “markups” : null
    }
}

Every option has a price and every price indicates:

1. Currency
2. Amount (net and gross in Hotel-X Pull Buyers API)
3. Binding
4. In the case of Travelgate Legacy Pull Buyers API, we also provide the commission.
5. Markup applied over the supplier price, whenever provided.
6. Minimum Sellng Price (if specified by the Supplier).

What is a Binding price?

When a price is tagged as "binding", it means it’s mandatory to sell at or above the indicated amount, gross or Minimum Selling Price if informed. In Spain, this is also called the mandatory price or PVP.

binding values

• If binding is set as true: the Buyer must sell the hotel at least at the price provided by the Seller, not less.
• If binding is set as false: the Buyer can sell the product for a lower price than the one returned by the Seller.

Understanding the Minimum Selling Price (MSP)

The minimumSellingPrice (MSP) represents the lowest price at which the Buyer can sell the Supplier's product to their customers. This feature was introduced in Travelgate in 2022. Previously, we relied on the binding tag to identify mandatory gross amounts that served as minimum selling prices.

What information does the MSP return?
The MSP field indicates the amount to be set as the mandatory price and allows Buyers to obtain a competitive pricing reference. This is especially valuable when there are three different pricing amounts in place:

• Gross price: gross amount to be subject to commission subtracting.
• Net price: net amount with no commission included, amount payable to the Seller.
• Minimum Selling Price: lowest price allowed to be marked up by the Buyer when selling to their own customers.

Every time a Supplier confirms that they will return a 'MinimumSellingPrice' in their response, we will display that value in our 'MinimumSellingPrice' node. Additionally, we will set 'Binding=true'*.

*Note that this may not apply to Legacy Pull Buyers API users who have not implemented the MinimumSellingPrice (MSP). To ensure you can read this information, make sure to implement the MSP.

Minimum Selling Price Example:

“binding” : true,
“net” : 150
“gross” : 170,
“currency” : “USD”,
“minimumSellingPrice” : 160,

In this case, we cannot sell lower than 160; and if we had no MSP field, we would need to inform gross as the binding minimum amount and will not be so competitive.

Handling Net and Gross Prices with Minimum Selling Price (MSP)

If a Supplier provides distinct 'net' and 'gross' nodes, we will return those values as received. However, if they only include a single 'totalprice' node along with the Minimum Selling Price, we will confirm whether this 'total' represents a gross or net amount to ensure accurate values in the 'net' and 'gross' nodes.

If no Minimum Selling Price is provided by the Supplier, we will ask whether any of the returned prices should be designated as the Minimum Selling Price (e.g., MSP = net or MSP = gross, or any specific treatment they request). If the Supplier confirms that no Minimum Selling Price needs to be set, we will process the net, gross, or both accordingly. The binding will default to 'false' unless otherwise specified by the Supplier in a specific node of their response.

Could a Minimum Selling Price Be Lower than the Gross Amount?

It's not something that happens often, but it's important to be aware that it can occur. When reselling hotel products, the final price is determined by the business rules agreed upon by all parties involved. So, if the Minimum Selling Price (MSP) is communicated and followed, a wholesaler might sell to a B2B Partner at a rate higher than the MSP in order to apply a larger markup. This strategy can still lead to sales due to is a high demand for the product.

Case example:

1. Hotel chain sells to a Bedbank with rates 10% commissionable:

   “binding” : true,
   “net” : 180,
   “gross” : 200,
   “currency” : “USD”,
   “minimumSellingPrice” : 200,
2. Bedbank sells to a B2B wholesaler and applies 9% markup, selling with net rates:

   “binding”: true,
   “net”: 196.2,
   “gross”: 196.2,
   “currency” : “USD”,
   “minimumSellingPrice” : 200,
3. B2B wholesaler sells to an OTA with 3% markup and net rates:

   “binding”: true,
   “net”: 202.08,
   “gross”: 202.08,
   “currency” : “USD”,
   “minimumSellingPrice” : 200,

As you can see, we always provide and maintain the Minimum Selling Price as a reference. However, when multiple parties sell the same product, it's possible for the gross price to exceed the MSP initially set by the hotel chain.

But does this mean the product is not competitive?
Not necessarily. While the rate may be higher than what the hotel chain offers on their website, there are situations where high demand and limited inventory make selling a room, even at a slightly higher price than the direct channel, a fantastic opportunity for our distributors.

Do all Sellers provide Minimum Selling Price?

Not all sellers will have implemented this feature in their own APIs integrated into our Marketplace. However, we will ensure that our Buyers are informed about the Minimum Selling Price (MSP) whenever they use this field.

minimum selling price values

• “minimumSellingPrice” = amount: the lowest possible amount that can be sold commercially.
• “minimumSellingPrice” = 0: no minimum selling price is provided.
• “minimumSellingPrice” = -1: we have no information about MSP from the Seller (only applicable to Legacy Pull Buyers API).

Should I Ignore the Binding Field when Using the Minimum Selling Price?

Since we are handling highly sensitive information that can have a significant impact on your business, we strongly recommend that you always make proper use of both fields.

• Binding field: it is used in order to determine whether the amount is mandatory or not.
• Minimum Selling Price field: it is used in order to build your prices based on price restrictions and competitiveness.

What should I do as a Buyer if I haven't implemented the Minimum Selling Price and I receive NET=Gross?

• If you receive binding = true and the Seller returns the Minimum Selling Price (MSP): Minimum Selling Price = Gross
• If you receive binding = false and the Seller does not return the Minimum Selling Price (MSP): There is pricing freedom.

Understanding commission in Hotel-X and Legacy Pull Buyers API

In Hotel-X, we provide both the "Net" and "Gross" prices for each rate to assist with calculations. In contrast, the Legacy Pull Buyers API only provides the amount, commission, and binding information. For instance:

<Price currency = "EUR" amount = "36.20" binding = "false" commission = "-1"/>

Commission values:

• Commission = 0: the price returned is a net price.
• Commission = -1: the Seller has not provided the Selling price nor the commission. In case it exists, commission has been agreed at a contractual level with the Seller and it is not traveling via Travelgate.
• Commission is greater than 0: X = % of the commission that is applied to the amount.

Note that there is no "commission" field in the Hotel-X Pull Buyers API because we simplify the process by calculating the net amount directly. If you need to determine the specific commission deducted, you can simply subtract the net amount from the gross amount: Gross - Net = Commission.

How should I interpret "binding" and "commission" to determine what kind of price it is?

Examples:

Category	Price (Price curr.)	Amount	Binding	Commission	MSP (Minimum Selling Price)	Notes
Cases without binding prices and MSP	Unknown Price	EUR 200	False	-1	N/A	Unknown price
	Net Price	EUR 100	False	0	N/A	Net price
	Gross Price	EUR 150	False	20	N/A	Gross price
Cases with binding prices (MSP version)	Net + Binding=True + MSP	EUR 100	True	0	120	Net price with binding and MSP
	Gross + Binding=True + MSP	EUR 150	True	20	180	Gross price with binding and MSP
	Unknown + Binding=True + MSP	EUR 100	True	-1	120	Unknown price with binding and MSP
Cases with binding prices (No MSP "deprecated")	Net + Binding=True	EUR 120 (Supplier MSP value)	True	10	N/A	Net price with binding, no MSP (deprecated)
	Gross + Binding=True	EUR 180 (Supplier MSP value)	True	20	N/A	Gross price with binding, no MSP (deprecated)

Important:

Please keep in mind that if you don't follow these rules, you may put at risk your commercial agreement with the Seller.