You set up a 25% promotion on Booking.com. Genius guests then get another 10% to 15%, and guests booking on a phone get an extra 10% mobile discount. So is that 45% off? And once commission is taken, how much actually lands in your account?
Many villa owners only find out when the monthly payout arrives, and it's well below what they expected. This guide shows how to calculate OTA promotions step by step, using the method we use to manage our clients' villas. The examples use a round IDR 1,000,000 room rate so they're easy to follow.
First, the terms
| Term | What it means |
|---|---|
| BAR (Best Available Rate) | Your base room rate before any promotion. Every calculation starts here. |
| Rate plan | Versions of the BAR, such as Flexible (cancellable) and Non-Refundable (usually 10% below BAR). |
| Basic promotion | Basic Deal, Early Bird, Last Minute, minimum 3 or 7 nights. The promotions you set yourself. |
| Targeting | Discounts for a specific group: guests booking on a phone, or from a particular country. |
| Member | The OTA's loyalty discount: Genius on Booking.com, VIP on Agoda, member prices on Expedia, Diamond on Trip.com. |
| Commission | The OTA's cut of each booking, as set in your contract. |
| Tax on commission | VAT charged on top of that commission. The line most people forget. |
| Payout | What you actually receive. The only number that really matters. |
Step 1: stack the discounts correctly, don't just add them up
When several discounts apply at once, each OTA combines them in its own way. Two patterns come up most often.
Pattern A: one after another (compounding). Each discount is taken from the price left after the previous one. This is usually how Booking.com applies them:
- BAR IDR 1,000,000 − 25% promotion = IDR 750,000
- IDR 750,000 − 10% mobile discount = IDR 675,000
- IDR 675,000 − 10% Genius = IDR 607,500
The total discount is 39.25%, not 45%. The formula: 1 − (1 − 0.25) × (1 − 0.10) × (1 − 0.10) = 0.3925. For a Genius guest on 15%, the last step becomes IDR 675,000 − 15% = IDR 573,750, a total discount of 42.6%.
Pattern B: added together. The percentages are summed and taken off the BAR once. A 29% promotion plus a 10% member discount is 39% off, or IDR 610,000. This pattern is usually used by Agoda and Trip.com.
Stacking rules change, and not every promotion can be combined with every other. Before switching a new promotion on, always check the price preview in each OTA's extranet. It shows the final price the guest will see.
Step 2: take off commission, then the tax on it
Commission is charged on the price after discounts. Then VAT is charged on the commission itself, 11% in this example. With an 18% commission:
| Calculation | IDR | |
|---|---|---|
| Price the guest pays | after the 39.25% discount | 607,500 |
| OTA commission | 18% × 607,500 | −109,350 |
| Tax on commission | 11% × 109,350 | −12,029 |
| Your payout | 486,122 |
From a IDR 1,000,000 BAR, about 48.6% reaches your account. If the booking is on the Non-Refundable rate, 10% cheaper to begin with, the payout drops to around IDR 437,500.
Also check which figure the commission is calculated from: the price before or after tax and service. It's in your contract, and it differs between platforms. Some platforms even take their commission first and apply the discounts to what's left. The order changes the result, so make sure your calculation method follows each platform's rules.
Step 3: don't forget the extra costs
- Visibility programmes such as Booking.com's Preferred Partner Programme or Expedia's Accelerator add a percentage on top of your base commission. In our calculation method, Expedia's Accelerator counts as an extra 8%, and the VAT applies to the commission and the Accelerator together.
- Prices shown "plus plus". Some OTAs display rates before tax and service (21% in Bali), which are added when the guest pays. If your BAR already includes tax, divide it by 1.21 first to get the base rate, so discounts and commission are worked out from the right number.
- Airbnb has its own fee structure. In our example it's a 15.5% commission plus 11% tax. If your Airbnb rate plan isn't linked to your pricing system, promotions there have to be set by hand.
Step 4: keep the guest's price level across every OTA
Guests often compare your villa on two or three OTAs at once, and the platforms watch rate parity. Because each OTA combines discounts differently, you can't simply use the same promotion percentage everywhere.
An example from our calculation method: on Booking.com, a 25% promotion, a 10% mobile discount and a 10% Genius discount give 39.25% off. To land Agoda on the same price, its basic promotion is set to 29%, because 29% plus the 10% member discount is 39%. The final prices on the two platforms end up almost identical, even though the promotion percentages are different.
Build one comparison table: the final price the guest sees and your payout, per OTA, per room type. That table shows you which channel is priced too low, and which one earns you the most.
Step 5: work backwards from your minimum payout
The safest way to set promotions is to start from the lowest payout you'll accept per night and work back to the BAR:
Payout = BAR × (1 − total discount) × (1 − commission × (1 + tax on commission))
Example: you want at least IDR 500,000 a night, with the 39.25% discount stack and an 18% commission. The factor is 0.6075 × (1 − 0.18 × 1.11) = 0.4861. So your minimum BAR is IDR 500,000 ÷ 0.4861 ≈ IDR 1,030,000. Below that, promotions this deep pay you less than your target.
The mistakes we see most often
- Switching on every promotion at once without working out the stack, then getting a shock when the payout arrives.
- Calculating commission without its VAT. Small per booking, large over a year.
- Forgetting the Non-Refundable rate gets discounted too. It already sits 10% below BAR, then the promotions come off on top.
- Using the same promotion percentage on every OTA, when each one calculates differently, so the final prices don't match.
- Joining a paid programme without recalculating the payout. The extra commission changes every number above.
Before your next promotion: write down the BAR, every discount that will apply at the same time, the commission and the tax on it. Work out the payout with the formula in Step 5 and compare it with your minimum. If it falls short, drop one of the discounts.
Correctly calculated promotions are one part of running your OTA channels well. For the wider picture, read what an OTA manager does. If working this out for five OTAs and six room types every season sounds like a lot, that's exactly what our villa OTA manager service takes care of, and you can follow occupancy and revenue by channel in Hotel Business Intelligent.
