Negotiated Wholesale and Tour Operator Rates Guide "Part II"
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Step 1: Set Individually Negotiated Discounts
· Decide the percent discounts for each individually negotiated wholesaler using the Wholesale/TO Pricing Worksheet.
· Discounts should not be less than your Standard Net Wholesale rate.
· Offer the same discounts to similar wholesalers when applicable (similar production, value, negotiable items, profitability).
· Determine rates for each season, room type, and weekday/weekend as needed.
· Document pricing recommendations in the Wholesale/TO Pricing Worksheet.
· Review pricing with your General Manager and Sales Strategy team for approval.
· Issue a signed written contract including all rate details.
· Reevaluate each wholesaler’s performance quarterly and take corrective action if commitments are not met.
Check Part One Here
Step 2: Other Pricing Considerations
· Opportunities may arise for seasonal specials to increase wholesale mix or favor high-value wholesalers.
· Factor seasonal discounts into individually negotiated rates.
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Step 3: Room Only / Unpackaged Rates
· Standard and individually negotiated wholesale rates should only be used in bundled packages.
· Rates cannot be sold as rooms-only to corporate or leisure travelers.
· Wholesalers selling rooms-only may require a separate rate program.
Step 4: Who Is Eligible for Wholesale/TO Rates?
Qualifying the Wholesaler
Before negotiating, ensure the wholesaler meets these criteria:
· Reputation: Solid, credit-worthy entity with sound business practices.
· Business Model: Market through travel agencies or other wholesalers, not direct-to-consumer rooms-only sales.
· Volume: Drive profitable volume justifying discounts beyond standard rates.
· Packaging Capability: Ability to develop packages including air, hotel, and optionally transportation or entertainment/attractions.
· Marketing Materials: Produce minimum promotional brochures/tariffs for distribution. Guest Vouchers: Ability to provide vouchers for check-in.
Distribution Awareness
· Understand the wholesaler’s distribution channels.
· Ensure any rooms-only rate sold directly to consumers is never below the hotel’s best available rate. Discuss compliance and mark-up adjustments to avoid discrepancies
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Step 5: Types of Traditional Wholesalers
· FIT Operators: Packaged individual travel via travel agents or tour operators.
· Receptive Tour Operators: Selling inbound net room rates to overseas tour operators.
· Group Travel: Ad hoc or series tours, incentive tours, coach tours.
· Domestic Wholesalers: Serving in-country travelers for packaged travel.
Emerging Changes
· Receptive/inbound operators may begin offering rooms-only rates online.
· Airline-owned wholesalers and tour operators may transition to rooms-only via websites.
· FIT operators may also offer unpackaged rooms-only products online.
Step 6: Rooms-Only Risk Management
· Encourage packaging whenever possible.
· Ensure wholesalers agree to adjust rates within 24 hours if rooms-only rates are lower than your best available rate.
· Evaluate the risks and benefits of restricting rooms-only online.
· Avoid offering wholesale rates to intermediaries who use rooms for corporate incentives unrelated to hotel stays.
Key Takeaways
· Align negotiated rates with your overall revenue strategy.
· Keep pricing structures simple and easy to understand.
· Qualify wholesalers carefully and monitor performance regularly.
· Encourage packaging to protect revenue and brand integrity.