Revenue Model & Pricing
How ABc makes money — and, more importantly, how we make money in alignment with our owners. The model is hybrid: a predictable subscription per property, plus a small commission only on bookings where ABc was the acquisition channel. No double-dipping on OTAs, no hidden gateway markups, no charging for the owner's own customers.
Subscription per property + commission only on bookings where ABc brought the customer. The owner never pays us for a customer they brought themselves.
Why hybrid (not pure subscription, not pure commission)
Pure subscription
- Predictable MRR — good
- But: no skin in the game when the owner does well or poorly
- Owners feel they're paying when no bookings come
- Hard to justify higher tier prices to small operators
Pure commission
- Aligned incentives — great
- But: unpredictable MRR, scares enterprise buyers
- Punishes high-performing properties (they pay more)
- Doesn't cover fixed infrastructure costs in low season
Hybrid — what we picked
- Subscription covers the platform infrastructure (channel manager, sync, hosting)
- Commission only on direct (abc.com) bookings — we're paid for the leads we generate
- OTA bookings: 0 % commission — Booking.com already takes 15–25 %, we don't double-tax
- Manual desk bookings: 0 % — owner's customer, owner's effort
Industry validation
- Cloudbeds, Hostaway, Little Hotelier, eviivo — all hybrid
- OYO ran a similar model with revenue share + minimum guarantee
- Hybrid scales from 1-property B&Bs to 50-property chains
- Lowest churn risk: even if bookings dry up, subscription is still good value
The commission attribution rule
The single most important rule in the whole revenue model:
Tier structure
Four tiers. Growth is the anchor — pricing, copy and onboarding all nudge here.
Starter
- Up to 10 rooms
- 1 OTA channel (iCal only)
- 7 % commission on direct bookings
- 0 % on OTA + manual
- Email support
- Basic dashboard
Growth
- Up to 30 rooms
- 3 OTA channels (real API sync)
- 5 % commission on direct bookings
- 0 % on OTA + manual
- Email + chat support
- Multi-property dashboard
- Advanced analytics
Pro
- Unlimited rooms
- All OTA channels
- 3 % commission on direct bookings
- 0 % on OTA + manual
- Phone support
- Advanced analytics
- Priority OTA sync queue
- Bulk operations
Enterprise
- Unlimited everything
- All OTA channels + custom
- Negotiable commission
- Dedicated CSM
- SLA-backed uptime
- API access
- Custom integrations
- Quarterly business review
Per-property billing with bundle discount
Each property is its own line item on the bill. This scales fairly — a 50-room resort uses more sync, inventory and emails than a 4-room cottage. Bundle discount kicks in for multi-property owners:
An owner with 5 Growth-tier properties pays ₹3,999 × 5 = ₹19,995, less 20 % = ₹15,996/mo for the whole portfolio. Single account, one bill, properties grouped in the dashboard.
Free tier — the acquisition funnel
A permanent free tier exists not as a product but as a lead magnet. It seeds inventory on the public site, builds SEO long-tail, and funnels serious operators to paid tiers within ~30 days.
What's in it
- 1 property, max 5 rooms
- iCal sync only (no API channels)
- ABc branding visible on listings
- 12 % commission on direct bookings (intentionally higher than paid tiers)
- Email-only support
- No credit card required
Why we offer it
- Seeds inventory cheaply for the public site
- Builds SEO with thousands of property pages
- Forecast 10–15 % free→paid conversion in year one
- Higher commission pushes successful free users to upgrade
- Marketing tagline: "list your property in 20 minutes — free"
How OTA bookings still make us money
We can't take a cut on Booking.com / MMT / Airbnb routed bookings — the OTA already collected its 15–25 %. So how do we earn on them?
1. Subscription is the price of the channel manager
The Booking.com / Airbnb / MMT adapter stack — XML parsers, race-condition guards, daily reconciliation, drift detection — lives on our side. The owner pays ₹3,999/mo for that infrastructure whether they get 5 or 500 OTA bookings.
2. OTA volume drives them up tiers
A property doing 50+ OTA bookings/month needs Growth tier (3 channels API). A multi-property operator with 200+ OTA bookings/month needs Pro. The more OTA revenue they process, the more they need us — and the higher tier they're on.
"I'm paying ABc 0 % on every Booking.com sale, and they're handling the whole sync. That's the cheapest channel manager I've ever used." This is the line that closes the sale.
Secondary revenue streams
Subscription + commission is ~85 % of our revenue. The rest comes from optional services that owners self-select into.
| Stream | How it works | Notes |
|---|---|---|
| Annual prepay | Owner pays 12 months up front, gets 15 % off | Boosts cash flow; ~30 % of customers take it; reduces churn |
| Razorpay referral revshare | Razorpay pays us ~0.3 % of GMV we send their way (refer-a-merchant program) | Invisible to the owner — owner pays Razorpay's normal rate |
| Setup / onboarding | ₹5,000 one-time for white-glove 1:1 setup | Free if owner self-serves. Useful for reluctant / non-tech owners |
| Premium support | ₹2,000/mo add-on for 24×7 phone support | Useful for properties with night-desk staff or international guests |
| Photography service | ₹15,000 one-time, outsourced to a partner photographer | We earn referral margin · drives listing quality |
| Branded mobile app V2 | ₹50,000 setup + ₹5,000/mo | Enterprise-only upsell · React Native template |
What we explicitly don't charge for
Anti-patterns we've deliberately rejected, and why:
❌ No payment-gateway markup
Razorpay charges ~2 %; we don't add a markup. Owners hate hidden fees. We earn from Razorpay's referral revshare quietly instead. Trust beats 0.5 %.
❌ No commission on manual bookings
Front-desk staff already entered it — the owner's effort acquired the customer. Charging here taxes the owner's own work. Bad signal.
❌ No per-room subscription
Feels like a tax on growth. Tier ceilings (10 / 30 / unlimited rooms) handle scale without weird math.
❌ No campaign / coupon launch fees
Campaigns drive direct bookings, which drive our commission. We want them used heavily, not gated.
Unit economics — worked example
A typical Growth tier customer: 8-room boutique hotel, 60 % occupancy, ADR ₹2,800, channel mix 40 % direct / 50 % OTA / 10 % manual.
| Source | Amount |
|---|---|
| Subscription (Growth, 1 property) | ₹3,999 |
| Commission on direct (5 % of ₹1,61,280) | ₹8,064 |
| Commission on OTA | ₹0 |
| Commission on manual | ₹0 |
| Total ABc revenue from this owner | ₹12,063 / mo |
| Effective rate on owner's gross revenue | ~3.0 % |
| vs Booking.com effective rate (on their share) | 15 % |
Scale forecast
If we hit 100 such customers in year one:
How commission is computed & settled
-
At booking confirmation
A
commission_invoicesrow is created with the booking ID, applicable rate (from the property's current tier), and computed amount. Status:pending. -
On check-in
Status moves to
earned. We only book commission revenue after the stay actually starts — refunds before check-in void the commission cleanly. -
Cancellation handling
If the booking is cancelled, the commission row is marked
voided. No revenue recognised. -
Monthly settlement
On the 1st of each month, all
earnedcommission rows for the previous month are aggregated into one invoice and either auto-deducted from the owner's payout, or billed separately if the owner pays directly. -
Reporting
Owner sees a clear "ABc fees this month" report — subscription + commission earned, with every booking listed. No surprises.
Billing & invoicing
- Subscription — auto-debited via Razorpay subscriptions on the 1st of each month (or anniversary day for prepay).
- Commission — netted against the owner's payout (preferred) or invoiced on the 5th of the following month.
- GST invoices — issued from our Indian entity to the owner's GSTIN (if supplied). 18 % GST on subscription, 18 % on commission services.
- Currency — INR for MVP. Multi-currency in V2 with Razorpay International.
- Late payment — 7-day grace, then features gradually disable (new bookings on direct site first, then channel sync, then account read-only).
- Refund of subscription — pro-rated refund within the first 14 days; no refund after that. Commission is never refunded (it was earned).
Pricing principles
Transparent
No hidden fees. The owner can compute their monthly bill on the back of a napkin.
Aligned
We earn commission only when we bring the customer. Same boat as the owner.
Predictable
Subscription floor covers the platform. Commission scales with success.
Scalable
From 5-room homestay to 50-property chain — same model, different tier.
Fair
Free tier for tiny operators. Enterprise terms for chains. No one priced out.
Verifiable
Every commission line ties to a booking ID; every fee is in the audit log.
Data model
subscription_plans
- iduuid
- codestarter · growth · pro · enterprise · free
- monthly_pricemoney
- annual_pricemoney
- direct_commission_pctdecimal
- max_roomsint · nullable
- max_ota_channelsint · nullable
subscriptions
- iduuid
- property_id→ properties
- plan_id→ subscription_plans
- billing_cyclemonthly · annual
- statusactive · past_due · cancelled
- started_attimestamp
- next_billing_attimestamp
- bundle_discount_pctdecimal
commission_invoices
- iduuid
- booking_id→ bookings
- property_id→ properties
- booking_sourceenum
- rate_pctdecimal
- base_amountmoney
- commission_amountmoney
- statuspending · earned · voided · settled
- settled_attimestamp · nullable
Open decisions (final numbers TBC)
- Pricing in INR is a starting point — needs a competitive check against Cloudbeds/Hostaway India lists and the client's market intuition before launch.
- The 7 %/5 %/3 % commission ladder is a defensible default — could tighten to 6 %/4 %/2 % to be more aggressive on direct vs OTA economics, or loosen if onboarding is harder than expected.
- Bundle discount thresholds (3 / 5 / 10) can be tuned with sales data after first quarter.
- Free-tier commission of 12 % is a placeholder — high enough to push to paid, low enough that the owner still says yes.