How to calculate relative city tax for net of commission reservations

Expedia Collect bookings come to Mews with a price net of commission. For properties that have relative city tax (a percentage from the net rate), it should be calculated from the amount that the customer paid (commission included), not the amount received in Mews.

This calculation of city tax only applies to city tax as a product. To set it up, follow these steps:

 

1. Create separate rates for Hotel Collect and Expedia Collect reservations. Create and configure a rate.
2. Set them up separately in the channel manager as well (both in Mews and the channel manager extranet) Connect your channel manager
3. Create a product for the city tax and product rule to be applied always to all reservations. Set up city tax. 
4. Create a separate product for Expedia Collect. For guests not to see the difference in their bills, use the same words for both products but one with capital C and T so you can differentiate them, e.g. city tax and City Tax. 
5. Add the percentage to the relative price of the city tax product that needs to be added to raise the net amount to gross. To know what percentage to add to the net price so that it becomes gross, the net of commission price has to be turned to gross, so that it is taken from the gross with commission price and not the one received in Mews.

 

Calculation of the city tax percentage for Expedia Collect

 

Note: net and gross here means net and gross of commission (not VAT).

 

Formula 1: Percentage = commission/commission as number

Formula 2: to turn commission into a number: (100 – commission)/100 

 

Example 1:

 

• Expedia Commission: 15%
  1. Apply Formula 2 to turn the 15% into a number: (100 – 15)/100 = 85/100 = 0,85 
  2. Use Formula 1: 15/0,85 = 17,6470588 
  3. Adding 17,6470588% to the net price equals the gross price that the customer paid.

 

Example 2:

 

• €100 is net of commission. To know how much the customer paid to Expedia (gross price with commission): 100 + 17,6470588% = 117,647059 ≈ €117,65 
• To check if the calculation is correct, deduct 15% from this amount and you will get the €100: 117,65 – 15% = 100,0025 ≈ 100 EUR
• To calculate the required city tax percentage, add the outcome of the formula to the regular city tax percentage: the city tax is 7% of the net rate.
• To have a product calculated from the gross price, set up the relative price of the product as 8,24%: 7 + 17,6470588% = 8,23529412 ≈ 8,24 

In the table below, you can find the advised percentage city tax product for Expedia Collect reservations (depending on relative city tax amount and Expedia commission):

 

If your commission amount or city tax amount is missing, use the formula described before or access the Mews Digital Assistant in Mews Operations.