Referral Fees or Reseller Margins for Hotel Tech Partners

Referral Fees or Reseller Margins for Hotel Tech Partners

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TL;DR

  • A referral fee pays for an introduction; a reseller margin pays a partner to sell, invoice and usually support the hotel.

  • Hostaway publishes 20% for 12 months, which is $1,200 on a $500 a month customer.

  • A 20% reseller discount on that same customer costs $3,600 over three years but replaces sales and support costs.

  • Choose resellers for markets you cannot staff; choose referral fees when your own team can close and support deals.

Sooner or later every hotel tech vendor gets the same request. A revenue management consultancy, a regional distributor or a hotel association wants to sell your product. The first commercial question is how they get paid: a referral fee for introducing hotels, or a reseller margin for selling, contracting and often supporting them. The two models look similar on a spreadsheet. They behave very differently in practice.

This comparison sets out what each model is, what real programmes publish, how the economics compare on the same customer and which one fits which partner.

The two models defined

A referral fee is a payment from the vendor to a partner for introducing a customer who goes on to buy. The vendor runs the sale, signs the contract, bills the hotel and supports it. The partner's job ends at the introduction, apart from staying friendly with the client.

A reseller margin is the difference between what the partner pays the vendor and what the partner charges the hotel. The partner usually buys at a discount off list price, owns the commercial relationship and invoices the hotel. Many resellers also deliver onboarding and first line support, and bundle services around the licence.

Referral fee: you pay for the introduction and keep the customer. Reseller margin: you give up part of the price and part of the relationship in exchange for a partner who sells, bills and supports.

What published partner programmes actually pay

Few hotel tech vendors publish reseller terms, but many publish referral terms. These are the figures as each vendor states them on its own programme page.

Programme

Model

Published terms

Conditions

Hostaway

Affiliate referral

20% of revenue, paid monthly for the first 12 months

Customer must stay active; 90 day cookie window

Lodgify

Affiliate referral

20%, 25% or 30% for up to 12 months by tier

Tiers rise above $3,000 and $10,000 in referred sales

Sirvoy referral

Referral

50% of payments in each client's first six months

Two paying clients active 30 days; $600 minimum payout

Sirvoy partner

Tiered referral

Lifetime commission from 5% for clients 1 to 5, rising to 25% from the 51st client

Same eligibility rules

Guesty

Affiliate referral

$100 for the first listing, $50 per additional listing, up to $5,000 per customer

Paid after the customer completes three months

Toast Advocates

Referral

Up to $2,000 per successful referral

Paid when the referred location goes live

HubSpot Solutions Partners

Referral and co-sell

20% commission for 3 years on deals partners bring

Programme fee from $400 a month unless software spend covers it

Text (LiveChat)

Referral or reseller

20% to 25% commission or discount by tier

Higher tiers depend on managed revenue

Two hotel tech leaders show the other common pattern: tiered programmes with terms shared privately. SiteMinder’s partner programmes reward any referral that becomes a paid customer, with the amount varying by tier (Partner, Certified Partner and invite-only Preferred Partner), and the detail sits in a downloadable PDF rather than on the page. Pipedrive’s solution partner programme offers a discount on list price or commission across Authorized, Gold and Platinum tiers, and requires certified staff at each tier, from one sales and one support person up to seven certifications at Platinum.

Referral fee vs reseller margin, side by side

Factor

Referral fee

Reseller margin

Who owns the contract

Vendor

Partner

Who sets the price

Vendor

Partner, often within agreed limits

Who invoices the hotel

Vendor

Partner

Who supports the hotel

Vendor

Usually partner for first line, vendor behind

Typical published rate

20% for 12 months, or a fixed amount per customer

20% to 25% discount in Text's published tiers

How long it is paid

Often capped at 6 to 36 months, though Sirvoy's partner tier is lifetime

For as long as the partner holds the contract

Vendor's view of the customer

Full

Partial, depends on reporting terms

Best partner type

Consultants, associations, content creators

Distributors and service firms in a region

Main risk for the vendor

Paying for leads that would have come anyway

Losing the customer relationship if the partner leaves

The same customer, two ways

Hostaway publishes its own example: a customer paying $500 a month earns the affiliate $100 a month, $1,200 over the year. After month twelve the vendor keeps the full $500 and owns the relationship.

Now take the same $500 a month customer through a reseller on a 20% discount, the entry rate Text publishes. The reseller pays the vendor $400 a month and keeps $100 a month, $1,200 a year, for every year the hotel stays. Over three years the vendor gives up $3,600 instead of $1,200. In return, the reseller has done the selling, billing, onboarding and first line support, often in a language and time zone the vendor does not cover.

That is the real trade. A referral fee is cheaper in total but buys only the introduction. A reseller margin costs more over the customer's life, but it replaces sales and support costs the vendor would otherwise carry.

Which model fits your situation

Your situation

Better fit

Why

You have a sales team that closes well in the partner's market

Referral fee

You only need introductions, not a replacement for your team

The partner advises hotels but does not want to invoice them

Referral fee

Consultants and associations protect their neutrality

You are entering a country with no local team

Reseller margin

The partner covers language, billing and support you cannot yet staff

Hotels in that market expect a local contract and invoice

Reseller margin

Procurement may prefer a local entity

The partner sells a bundle of services with your product

Reseller margin

They need price control to package it

You cannot yet support customers you did not sell

Referral fee

Keeps support quality in your hands

Many vendors end up running both: an open referral programme for consultants and existing customers, and a small number of contracted resellers for markets they cannot reach directly. The mistake is letting the two blur, so that a referral partner starts negotiating price or a reseller expects to be paid just for introductions. Our comparison of direct sales and channel partners covers when partners make sense at all.

Terms to settle before you sign either

  • Qualification and timing: define when a referral counts, for example a paid customer active for 30 days or a live property, as Sirvoy, Guesty and Toast do.

  • Duration: cap referral payments at a stated number of months, and state what happens to reseller margin if the contract is renewed or upgraded.

  • Pricing floors: give resellers price freedom within limits so they do not undercut your direct team.

  • Data and reporting: require resellers to share property counts, renewals and support issues so you can see churn early.

  • Exit: agree who owns the customer contract and data if the reseller relationship ends.

For the clauses themselves, see our guide to a regional reseller agreement. If your partners are management companies rather than resellers, a partner programme for management companies is a better template, and building a referral motion in hospitality covers referrals from your own customers.

Partner economics are one part of the hotel tech GTM system, and the wrong model can leak margin for years. If you want a second opinion before signing your first reseller, book a free GTM leak audit and we will look at where your partner revenue is going.

Frequently Asked Questions

What is the difference between a referral fee and a reseller margin?

How much do hotel and hospitality software companies pay in referral fees?

What reseller discount should a hotel tech vendor offer?

When should a hotel tech vendor use resellers instead of referral partners?

Can a hotel software company run referral and reseller programmes at the same time?

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