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There are three common billing models that Free Hotel Marketing (FHM) offers as an external OTA manager: revenue-sharing, fixed fees, or a combination model. Each model has specific advantages and disadvantages, which FHM can recommend based on the goals and expectations of our clients.

1. Revenue-Sharing Model

With this model, FHM receives a percentage of the additional revenue generated through its marketing and OTA strategies for the hotel.

Advantages:

• Win-Win Approach: When revenue increases, both the hotel and FHM benefit equally. This creates strong motivation and a commitment to success.
• Flexibility and Adaptation to Revenue Goals: With this model, FHM forms a partnership that enhances trust in FHM’s capabilities.
• Scalability: If the hotel grows significantly and achieves high occupancy, FHM’s earnings also increase proportionally.

2. Fixed Free Model

With a fixed fee, FHM offers its services for a set fee, regardless of the revenue achieved.

Advantages:

• Planning Security: FHM receives a fixed amount, which provides both parties with financial stability and predictability.
• Attractiveness for Hotels with Stable Occupancy: For hotels with consistently high occupancy, a fixed fee model can be advantageous, as there are no additional revenue-based costs.
• Simplified Billing: A fixed fee is straightforward and is often perceived as more calculable and transparent for the client.

3. Combination Model

Some clients opt for a hybrid model that combines a base fee with revenue sharing. This way, FHM receives a minimum fee for its basic services and additional compensation when revenue reaches certain target thresholds.

A combination model can thus be an ideal solution, combining the benefits of both models to offer security as well as incentives for success.

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