Distribution
Consortia rate
Also written: consortia
What Consortia rate means
A consortia rate is a negotiated room rate offered to large travel agency networks, corporate travel management companies, and buying groups. It provides preferential pricing, specific amenities, and flexible cancellation terms in exchange for preferred placement within global distribution systems used by corporate travel buyers.
Formula
Net Consortia Yield = Negotiated Rate - GDS Fees - Consortia Commissions - Transaction Costs
How it is used
Revenue managers submit consortia bids annually through RFP programs like Lanyon to secure inclusion in corporate travel directories. Properties set these rates at a discount to BAR (typically 10% to 20%), often bundling value-adds like complimentary breakfast or Wi-Fi to stand out. Winning a consortia placement drives high-yield, predictable business travel volume, but requires strict rate parity maintenance and continuous tracking of production against target room nights to justify the lower net yield.
Worked example
A hotel offers a $200 consortia rate (15% off a $235 BAR) including breakfast. The booking incurs a 10% travel agent commission ($20) and a $5 GDS fee. Net room revenue per night is $175. If the corporate client produces 500 room nights annually, the account generates $87,500 in net room revenue plus incremental food and beverage spend.
Common mistake
Failing to account for combined GDS transaction fees, consortia participation fees, and travel agency commissions can turn seemingly profitable high-volume corporate contracts into margin-draining accounts.