Travel Industry Terms Every Agent should know in 2025 (and how they impact your Bottom Line)

The travel industry speaks its own language. Some terms are easy to pick up on the job, but others have layers of meaning that only reveal themselves after years of negotiating with suppliers, reconciling invoices, and navigating complex booking systems.

Misunderstand a term, and you risk losing credibility, missing a sales opportunity, or worse... eroding your profit without realizing it. Whether you’re a new travel advisor or a long-established agency owner, understanding these industry terms, and their financial implications, will make you a more effective seller and a stronger business operator.

This Antravia glossary is more than definitions. It’s a practical guide to how each term affects pricing, cash flow, and margins.

1. Supplier & Partner Terms

DMC (Destination Management Company)

A DMC is your local partner in the destination, providing ground services such as airport transfers, guided tours, event coordination, and sometimes accommodation.

Why it matters: The right DMC can transform client experiences, offering local expertise without the cost of in-destination staff.
Financial insight: Most DMCs require prepayment in local currency. If you quote in USD but pay in EUR or local currency, you carry foreign exchange risk and a single rate movement can shrink your profit unless you build in a buffer or hedge.

Bed Bank

A wholesaler that contracts hotel rooms in bulk and resells them to agents, OTAs, and tour operators. Examples include Hotelbeds (Bedsonline) and WebBeds

Why it matters: Bed banks offer access to competitive rates and availability not always found direct, but cancellation and payment rules can be rigid.
Financial insight: The merchant of record model affects cash flow, liability, and refund processing. Know whether you or the bed bank holds client funds.

Consortia

Networks of agencies pooling buying power to secure better supplier terms.

Why it matters: Membership often brings exclusive amenities, higher commissions, and marketing resources.
Financial insight: Track incremental revenue from consortia deals to ensure membership fees deliver a real return.

2. Distribution & Booking Tools

Channel Manager

Software that connects a hotel’s property management system to multiple booking platforms, syncing rates and availability in real time.

Why it matters: Reduces overbookings and rate discrepancies, especially with independent hotels.
Financial insight: When hotels use a channel manager, rate and commission negotiations are often cleaner because their data is more accurate.

GDS (Global Distribution System)

Systems like Amadeus, Sabre, and Travelport connect agents to airline, hotel, and car rental inventory.

Why it matters: Still essential for corporate travel and complex itineraries.
Financial insight: GDS contracts may include override commissions — for high-volume agencies, these can rival or exceed base commissions.

Dynamic Packaging

Technology that combines flights, hotels, and other services in real time.

Why it matters: Gives you flexibility to tailor packages, but increases complexity in payment and refund workflows.
Financial insight: Without disciplined reconciliation, mismatches between client receipts and supplier invoices can quietly erode your margin.

3. Payment & Revenue Terms

Merchant of Record (MoR)

The entity legally responsible for processing payments, handling refunds, and managing compliance. Also discussed in our payments blog.

Why it matters: Determines who controls funds and who bears credit risk.
Financial insight: Being MoR boosts cash flow but increases liability; if the supplier is MoR, you lose timing control but reduce fraud exposure.

Net vs. Commissionable Rates

Net rates are wholesale prices you mark up; commissionable rates include your commission.

Why it matters: Impacts how you quote prices and account for taxes.
Financial insight: Net rates can deliver higher profits but require you to manage merchant fees, FX, and tax obligations.

Override Commission

Additional commission paid when you meet a supplier’s sales volume threshold.

Why it matters: Can turn marginal sales into strong profit.
Financial insight: Track supplier sales closely — missing a threshold by a few bookings can mean thousands lost.

Net Remit / Direct Remit

Airline ticketing models where you either collect fare and remit net to the airline (net remit) or receive commission separately (direct remit).

Why it matters: Affects cash flow and refund liability.
Financial insight: Net remit boosts working capital short term but exposes you to higher merchant fee and refund risk.

4. Product & Operations Terms

FIT (Free Independent Traveler) vs. Group Travel

FIT bookings are customized for individuals; groups travel on the same itinerary.

Why it matters: Groups often deliver better rates but come with higher exposure if they cancel.
Financial insight: Secure deposits and set cancellation terms to protect margins.

Series vs. Ad-Hoc Bookings

Series bookings are pre-booked blocks of space; ad-hoc bookings are one-offs.

Why it matters: Series deals can improve pricing but create unsold inventory risk.
Financial insight: Only commit to series blocks with realistic sales forecasts.

Rack Rate

The standard, non-discounted hotel rate.

Why it matters: Commission percentages often use rack rates as a base.
Financial insight: If you secure a discount but commission stays tied to rack rate, you can increase profit without raising client price.

ADR (Average Daily Rate)

Average revenue a hotel earns per occupied room per night.

Why it matters: Understanding ADR trends helps with negotiation.
Financial insight: Tracking ADR over time can guide when to shift clients to higher-margin properties.

Yield Management

Pricing adjustments based on demand to maximise revenue.

Why it matters: Airlines, hotels, and cruises use it daily.
Financial insight: Understanding yield cycles can help you book at optimal times for both client value and commission.

Blackout Dates

Periods when discounts or promotions don’t apply.

Why it matters: Misquoting during blackout dates can turn profit into loss.
Financial insight: Always confirm blackout dates before quoting to avoid penalties and lost margin.

Final Word

Understanding the language of the travel trade isn’t just about industry credibility but it is about protecting your profits. Each term carries operational and financial implications that can influence your pricing, cash flow, and risk exposure.

At Antravia, we help travel agencies move beyond knowing the terms to using them strategically and negotiating better, pricing smarter, and building businesses that scale sustainably.

• DMC (Destination Management Company)
  What it is: A local company in the destination that provides ground services such as transfers, tours, events, and sometimes accommodations.
  Why it matters: Working with the right DMC means better client experiences and smoother operations, especially in destinations where you lack direct supplier contacts.
  Accounting/financial tip: Many DMCs require payment in local currency, which introduces FX risk if you quote in USD but pay in EUR, GBP, or local currency.

• Bed Bank
  What it is: A wholesaler that contracts hotel rooms in bulk at negotiated rates, then resells them to travel agents, OTAs, and tour operators.
  Why it matters: They can unlock inventory at lower prices, but watch for commission structures, payment terms, and cancellation rules.
  Accounting/financial tip: Depending on the booking model (merchant of record vs. agency model), your revenue recognition and tax obligations may differ.

• Channel Manager
  What it is: Software that connects a hotel’s PMS (property management system) to multiple booking platforms, keeping rates and availability synced in real time.
  Why it matters: For agents working closely with independent hotels, knowing if they use a channel manager can prevent double bookings and pricing mismatches.
  Accounting/financial tip: Helps hotels manage OTA commissions more efficiently, which can impact your negotiations if you’re buying direct.

• GDS (Global Distribution System)
  What it is: Platforms like Amadeus, Sabre, and Travelport that connect travel agents to airline, hotel, and car rental inventory.
  Why it matters: Still crucial for corporate travel and complex itineraries, even in the age of direct booking websites.
  Accounting/financial tip: Some GDS contracts pay incentives, which can be a significant revenue stream for high-volume agencies.

• Merchant of Record (MoR)
  What it is: The entity legally responsible for processing the payment and handling refunds, chargebacks, and compliance.
  Why it matters: Impacts who holds the cash, who bears the credit risk, and who is responsible for sales tax/VAT compliance.

• Override Commission
  What it is: Additional commission paid by a supplier when an agency hits a certain sales volume threshold.
  Why it matters: Often the difference between a break-even sale and a profitable one, and critical for scaling revenue.

• FAM Trip (Familiarization Trip)
  What it is: Discounted or free trips offered to agents so they can experience a destination or product firsthand.
  Why it matters: Great for selling confidently, but has IRS tax implications if the trip is not 100% business-related.

• Consortia
  What it is: Networks of agencies that pool buying power to get better supplier deals and perks.
  Why it matters: Can significantly increase your value proposition to clients, but membership fees and volume requirements need careful ROI analysis.

• Net vs. Commissionable Rates
  What it is: Net rates are wholesale prices you mark up before selling; commissionable rates already include your commission.
  Why it matters: Impacts how you quote to clients, how you handle taxes, and your gross margin.

• Series vs. Ad-Hoc Bookings
  What it is: Series bookings are pre-booked blocks of rooms or seats for repeated departures; ad-hoc are one-off bookings.
  Why it matters: Series commitments can improve pricing but increase risk if unsold.

• Net Remit / Direct Remit
  What it is: Payment models for airline ticketing where the agent either collects full fare and remits the net to the airline (net remit) or collects commission separately (direct remit).
  Why it matters: Impacts your cash flow, merchant fees, and reconciliation process.

• FIT (Free Independent Traveler) vs. Group Travel
  What it is: FIT bookings are tailored, independent arrangements for individuals; group travel is pre-packaged for multiple travelers on the same itinerary.
  Why it matters: Group travel can bring higher volume discounts but also larger financial exposure if the group cancels.

• Dynamic Packaging
  What it is: Technology that lets you combine flights, hotels, car rentals, and other components in real time to create a tailored package.
  Why it matters: Pricing flexibility is higher, but so is complexity in supplier payment schedules and refund policies.

• Rack Rate
  What it is: The published, non-discounted hotel rate.
  Why it matters: Commission percentages are often based on the rack rate, so understanding this can clarify your true earning potential.

• ADR (Average Daily Rate)
  What it is: The average revenue a hotel earns per occupied room per night.
  Why it matters: Useful when negotiating group rates or understanding a hotel’s pricing strategy in the context of your package margins.

• Yield Management
  What it is: Pricing strategy used by airlines, hotels, and cruises to maximize revenue based on demand patterns.
  Why it matters: Directly impacts when you should book certain services for clients to optimize their price and your commission.

• Blackout Dates
  What it is: Periods when promotional rates or offers do not apply.
  Why it matters: Critical for quoting accurately and avoiding profit erosion from last-minute supplier rate changes.

• Overriding Commission Structures
  What it is: Bonus commission paid for meeting sales volume targets with a specific supplier.
  Why it matters: Can significantly affect net margin if you plan sales strategically.