Commission-Free Booking Software: Costs at Every Volume
Percentage fees look cheap when you are small and expensive when you grow. This worked example shows where flat-fee booking software starts to save money, and where it does not.
Booking software for tours and activities is priced in two broad ways. Some systems take a percentage of every booking, either from you or as a fee added to your guest’s total. Others charge a flat monthly or yearly subscription, however much you sell.
Which is cheaper depends almost entirely on your booking volume. This article works through the numbers at five different volumes, shows how to find your own break-even point, and lists the costs that do not appear on either kind of pricing page. For the concepts behind the two models, see our guide to booking commission vs subscription; this article focuses on the worked example.
The assumptions
To keep the comparison fair, the example uses:
- Three percentage rates: 2%, 4% and 6%. These are illustrative. Rates in the market vary by provider and agreement; for example, a customer-paid booking fee of around 6% is commonly reported for FareHarbor (see our FareHarbor fees explainer).
- A flat plan at $708 a year ($59 a month billed yearly) and $948 a year ($79 a month billed monthly). These are Tourtify’s Growth plan prices; substitute any provider’s figures.
- An average booking value of $120, used only to show roughly how many bookings each volume represents.
- Card processing excluded. You pay your payment provider’s card fees whichever model you choose, so they do not change the comparison. For reference, Stripe’s standard US rate is 2.9% + 30¢ per domestic card payment.
The worked example
Annual cost of the booking software alone, by monthly online booking revenue:
| Monthly online revenue | Approx. bookings a month | 2% fee | 4% fee | 6% fee | Flat, billed yearly | Flat, billed monthly |
|---|---|---|---|---|---|---|
| $1,500 | 13 | $360 | $720 | $1,080 | $708 | $948 |
| $5,000 | 42 | $1,200 | $2,400 | $3,600 | $708 | $948 |
| $15,000 | 125 | $3,600 | $7,200 | $10,800 | $708 | $948 |
| $40,000 | 333 | $9,600 | $19,200 | $28,800 | $708 | $948 |
| $100,000 | 833 | $24,000 | $48,000 | $72,000 | $708 | $948 |
A few things stand out:
- At very low volume, a percentage can be cheaper. At $1,500 a month, a 2% fee costs $360 a year, about half the flat plan. If you are just starting out or sell only a few bookings a month, do not assume a subscription is automatically better.
- The gap widens quickly. At $15,000 a month, a 4% fee costs about $7,200 a year against $708 for the flat plan. At $40,000 a month, a 6% fee costs $28,800.
- Percentage fees grow with your success. Every price rise, extra departure or new product increases what you pay the software provider, even though the software is doing the same work.
If your volume is larger still, you might need a higher flat plan for more team members or channels. Even at Tourtify’s Scale plan ($1,188 a year billed yearly), the comparison at $100,000 a month is $1,188 against $24,000 to $72,000.
A second example: high-value trips
Percentage fees bite hardest when the average booking is large. Consider a trekking company selling 15 bookings a month at an average of $1,800, or $27,000 a month and $324,000 a year online.
| Pricing model | Annual software cost | Cost per booking |
|---|---|---|
| 2% fee | $6,480 | $36 |
| 4% fee | $12,960 | $72 |
| 6% fee | $19,440 | $108 |
| Flat, billed yearly ($708) | $708 | About $4 |
The software does roughly the same work for a $1,800 trek as for an $80 day tour: one booking, one set of emails, one manifest entry. A percentage model charges 22 times as much for it. If your trips are long or expensive, the volume at which a flat plan pays off is reached with very few bookings.
Where OTA commission fits
Do not confuse booking software fees with OTA commission. An online travel agency such as Viator or GetYourGuide typically takes 20–30% of the retail price, but it also finds the traveller for you. Booking software fees pay only for the tools. Our article on Viator and GetYourGuide commission looks at that trade-off separately.
Find your own break-even point
The break-even point is the annual online revenue at which a percentage fee costs the same as the flat plan:
Break-even revenue = annual flat cost ÷ percentage rate
Using the $708 flat plan:
| Percentage rate | Break-even annual revenue | Roughly per month |
|---|---|---|
| 2% | $35,400 | $2,950 |
| 4% | $17,700 | $1,475 |
| 6% | $11,800 | $983 |
Above those figures, the flat plan is cheaper. Below them, the percentage is cheaper. Using the monthly-billed $948, the break-even at 2% rises to $47,400 a year.
To use this for your own business:
- Add up last year’s online booking revenue (exclude cash and walk-in sales if your current provider does not charge on them).
- Multiply by the percentage in your agreement, including any fees on OTA or API bookings.
- Compare with the annual price of the flat plan you would actually need.
- Repeat with next year’s realistic forecast, not just last year’s figure.
“But my guests pay the fee, not me”
When the percentage is added to the guest’s total rather than deducted from your revenue, it is tempting to treat it as free. It is not quite that simple.
- Your guest sees a higher total. In the Baymard Institute’s survey of US online shoppers, 40% of those who abandoned a checkout cited extra costs such as fees as a reason. That research covers ecommerce generally, but fees added late in checkout are friction in any market.
- The total budget is the same. A traveller with $500 to spend on activities who pays $30 in booking fees has $30 less for your upgrades or a second tour.
- Refunds can be awkward. Some providers keep the booking fee when you refund a booking, which can leave guests out of pocket after a weather cancellation.
A guest-paid fee is a real cost of your product, even if it never passes through your bank account.
Costs that are not on either pricing page
Whichever model you compare, ask about the costs around the headline price:
- Card processing: the rate, who holds the merchant account, and extra charges for international cards or currency conversion.
- Website: whether a booking website is included or charged separately, and whether you can use your own domain.
- Payout timing: whether money goes straight to your own account or is held and paid out on a schedule.
- Channel fees: extra charges on bookings from resellers, OTAs or API connections.
- Plan limits: team members, channels, storage, email sends, and what happens when you reach them.
- Add-ons: waivers, messaging, gift vouchers or reporting sold as extras.
- Setup and exit: onboarding fees, contract length, and whether exporting your data costs anything.
Which model suits which business
- Percentage fees suit new or very small operators with low, unpredictable volume, and businesses that want no fixed cost at all while they test a product.
- Flat fees suit established operators with steady online sales, high-value trips such as multi-day tours where a percentage is a large sum per booking, and anyone planning to grow.
Many operators start on a percentage model and stay out of habit long after their volume has made it the expensive option. Checking the numbers once a year is worth the ten minutes it takes.
How Tourtify charges
Tourtify charges a flat monthly plan with no commission on bookings: $39, $79 or $129 a month, or $29, $59 or $99 a month billed yearly. Every plan includes a booking website with your own domain and deposits with automatic balance collection. Payments go straight to your own Stripe, PayPal or local gateway account, and your provider’s card fees are the only per-booking cost. Full plan details are on the pricing page, and you can run your own numbers during a 30-day free trial with no card required.