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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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In an industry worth over $1.9 trillion globally, travel and tourism businesses are increasingly turning to specialized software solutions to streamline operations, enhance customer experiences, and maximize revenue. At the heart of the travel SaaS ecosystem lies a critical business decision: which pricing model best suits your platform? Two dominant approaches have emerged in the market—booking-based pricing and commission-based pricing—each with distinct advantages for different types of tourism software providers.
The Evolution of Travel SaaS Pricing Models
The travel technology landscape has transformed dramatically over the past decade. According to Phocuswright research, travel technology investment reached $5.5 billion in 2021 alone, with booking platforms capturing a significant portion of this funding. This growth has been accompanied by increasingly sophisticated pricing strategies tailored to the unique dynamics of the travel marketplace.
Traditionally, travel software operated on license-based models with hefty upfront costs. Today's cloud-based solutions have shifted toward more flexible pricing structures that align vendor success with client outcomes. Let's explore how these modern pricing approaches work and which might be right for your travel technology business.
Booking-Based Pricing: Predictable Revenue for High-Volume Platforms
Booking-based pricing models charge travel providers a fixed fee for each reservation processed through the system. This approach has gained significant traction among hotel management systems, tour operator platforms, and transportation booking engines.
How Booking-Based Pricing Works
Under this model, the SaaS provider typically charges:
- A flat fee per booking (e.g., $1-5 per reservation)
- Tiered pricing based on booking volume (e.g., $2/booking for the first 500 bookings, $1.50 for bookings 501-2000)
- A hybrid model combining a base subscription with per-booking fees
According to Skift Research, booking-based models are particularly prevalent among hotel technology providers, with approximately 67% of property management systems employing some variation of this approach.
Advantages of Booking-Based Pricing
Predictable costs for clients: Travel businesses can accurately forecast technology expenses based on expected booking volumes.
Scalable revenue for SaaS providers: As Phocuswright notes in their "The State of Travel Startups" report, booking-based models create natural revenue growth aligned with client success.
Alignment with transaction value: For budget-conscious travel operators handling numerous low-margin bookings, per-booking fees can be more attractive than percentage-based commissions.
Real-World Example: Rezdy
Rezdy, a leading tour and activity booking platform, employs a booking-based pricing structure. Their model charges tour operators a fixed fee per booking while offering tiered monthly plans based on anticipated reservation volume. This structure has helped the company grow to support over 8,000 tour operators globally.
Commission-Based Pricing: Capturing Value in High-Margin Travel Segments
Commission-based pricing models take a percentage of the transaction value rather than charging per booking. This approach dominates online travel agencies (OTAs), metasearch engines, and luxury travel booking platforms.
How Commission Pricing Works
The typical commission pricing structure includes:
- Percentage-based fees (typically 10-25% of booking value)
- Sliding scale commissions based on booking value
- Premium placement fees for featured listings (common among OTAs)
According to a Cornell University Hotel School study, commission rates average 15-18% across major online booking platforms but can reach 25% or higher for premium placements or in competitive markets.
Advantages of Commission Pricing
Revenue alignment with transaction value: SaaS providers earn more from higher-value bookings, creating natural alignment with luxury and high-ticket segments.
Lower barriers to entry: Small travel operators appreciate no upfront costs, paying only when they earn revenue.
Incentivized platform marketing: Commission-based models motivate the platform to drive higher-value bookings, potentially benefiting both parties.
Real-World Example: Rezgo
Rezgo, a reservation system for tour and activity providers, offers a hybrid commission model charging a reasonable percentage of each booking while providing a comprehensive feature set including payment processing, channel management, and marketing tools. This approach has helped them build a global customer base of independent tour operators who appreciate the pay-as-you-earn structure.
Choosing the Right Pricing Model for Your Travel SaaS
When selecting between booking-based and commission pricing for your tourism software, consider these factors:
Market Segment Targeting
Booking-based models excel for:
- High-volume, lower-margin segments (transportation, budget accommodations)
- Enterprise clients seeking predictable technology costs
- Markets where participants resist revenue-sharing
Commission-based models work best for:
- Luxury and high-margin travel segments
- Marketplaces connecting buyers and suppliers
- Platforms providing substantial marketing value
Operational Considerations
The maturity of your travel SaaS also impacts pricing strategy. Early-stage platforms may benefit from commission models that lower barriers to adoption, while established players with proven ROI can command per-booking fees.
According to research from travel technology firm Amadeus, 58% of travel startups begin with commission models before evolving toward hybrid approaches as they mature.
The Future: Hybrid Pricing Models in Travel Technology
Industry trends point toward increasingly sophisticated hybrid models combining elements of both approaches. According to travel technology conference Phocuswright, 73% of travel executives believe pricing models will continue evolving toward performance-based components.
Modern travel SaaS platforms are increasingly offering:
- Base subscription + reduced commissions
- Volume-based sliding scales with booking minimums
- Value-added service tiers with pricing optionality
Conclusion: Aligning Pricing with Value Creation
The choice between booking-based and commission pricing ultimately depends on where and how your travel SaaS platform creates value. The most successful tourism software providers recognize that pricing strategy must align with both their value proposition and their clients' business models.
As travel technology continues evolving, the winners will be those who create transparent pricing structures that demonstrate clear ROI for travel providers while building sustainable businesses. Whether you choose booking-based fees, commission structures, or a hybrid approach, ensure your pricing communicates the unique value your platform brings to the complex travel ecosystem.
For travel businesses evaluating technology partners, understanding these pricing models is equally critical—the right partnership structure can become either a competitive advantage or a profit-draining liability as you navigate the increasingly digital future of travel and tourism.