How Agoda Makes Money [Traveler’s Guide]

AgodaHotels
Written By Taz Zaidi

How Agoda Makes Money

Agoda.com operates an interesting business model.

It’s highly profitable, yet it doesn’t actually own the rooms you see listed for rent. Instead, the site makes money by providing value to both sides of a booking transaction (guests and hosts).

In this guide, I’ll explain how Agoda makes money.

We’ll cover Agoda.com’s business model, how much commission Agoda charges hosts, as well as how hosts receive payment. Agoda is a hotel booking site, also called an “online travel agency” (OTA). OTAs sell travel products or services, such as hotels, packages, resorts, experiences, car rentals and flights.

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*Agoda.com provides a wide selection of steeply-discounted hotel rooms. To see today’s deals on hotels in any destination, click here.

How Agoda Makes Money

Agoda operates through an affiliate marketing model.

Affiliate marketing companies sell products and/or services they don’t own, but earn commission from the owner of those products or services each time they make a sale. Agoda does not own the hotels listed on its website. Rather, it acts as a middleman making life easier for both sides of a transaction (guest and host).

Guests can browse a wide range of accommodation options globally, compare prices within seconds, and securely book and pay for a stay - all without leaving Agoda.com. Hosts pay Agoda a commission for each completed booking a guest makes through their site - essentially being compensation for the marketing and exposure that Agoda provides them.

Agoda operates through the “merchant model” and “agency model”.

Through the merchant model, a guest pays Agoda for a booking, then Agoda forwards the host a percentage of that payment. Agoda charges the guest’s credit card directly, without passing card details on to the host.

Through the agency model, Agoda is being a broker between the guest and host. Rather than charging the guest directly, Agoda collects and passes guest’s card details on to their host, who will then charge the full payment total. The host will pay Agoda a percentage of their guest’s total booking payment.

*To see today’s deals on hotels in any destination, click here.

How Much Commission Does Agoda Charge Its Partner Hosts?

Every listing you see on Agoda.com was created by one of Agoda’s partner hosts. Agoda’s listings include luxury and budget hotels, resorts, homes, guest houses, apartments, hostels, villas, bed and breakfasts, and alternative or unique types of accommodation.

Agoda does not pay a standard commission rate to all hosts, though most hosts report a commission rate between 15 to 20 percent - meaning Agoda takes 15 to 20 percent of what the guest pays at checkout. In those cases, the host will receive the remaining 80 to 85 percent of the guest’s total payment.

You’ll find plenty of accommodation options on Agoda.com

*To see today’s deals on hotels in any destination, click here.

How Agoda Pays Hosts

Being an online marketplace, Agoda’s reputation is its most important asset.

Due to this, Agoda must ensure positive experiences for guests. In addition to vetting hosts, Agoda aims to limit fraud by placing a time buffer between the first guest that a host receives and their first payout. Agoda holds onto the first payout for 30 days after the host’s first booking is completed (after a guest checks out).

If the booking goes smoothly, Agoda will deposit the payment directly into the host’s bank account - after 30 days. From that point, Agoda will pay that host between 1-3 days after guests check out (via autopay deposit). Hosts can verify pending payment status in the “Bookings & Earnings" section of their account.

*To see today’s deals on hotels in any destination, click here.

Conclusion

Hopefully you found this guide helpful.

We covered how Agoda.com makes money, how its business model works, how much commission hosts pay, as well as how hosts receive payment. To learn more about Agoda, explore our other guides below.

Enjoy your travels!

Find Your Discounted Hotel On Agoda

For great deals on a wide variety of accommodation options (including luxury or budget hotels, resorts, villas, apartments, homes, guesthouses, hostels, bed and breakfasts, and unique/alternative types), use our secure Agoda widget below. Just input your destination and dates, then browse the results!

To go directly to Agoda.com, click here.

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Taz Zaidi [Author]
Taz Zaidi [Author]

Taz Zaidi is an American travel writer and the founder/creator of TRVLGUIDES.com. Connect with him on Instagram (@tazzaidi) or on his personal website, at tazzaidi.com.

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Taz Zaidi
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