Growth

Why Profitability Per Booking Matters More Than Revenue Per Booking

A high-revenue booking isn't necessarily a good one. Without visible supplier cost, revenue is a misleading metric to optimise for.

SSuneeb·March 2024·5 min read
3D illustration of a balance scale weighing a coin on one side against a clock on the otherGrowth

Revenue is an easy but misleading metric

Revenue per booking is the easiest number to track — it's just the invoice amount. It's also potentially misleading: a large, high-revenue booking with a thin margin (because supplier costs were high, or a discount was applied without checking the impact on profit) can be a worse outcome than a smaller booking with a healthy margin.

Why agencies default to tracking revenue anyway

Revenue gets tracked by default because it's visible immediately, at the point of sale — profitability requires knowing the supplier cost too, which in a manual process often isn't known until weeks later when the supplier invoice arrives and gets reconciled.

What changes when profitability is visible immediately

Once profitability, not just revenue, is visible at the point a booking is confirmed, sales decisions change — a discount request can be evaluated against its actual margin impact in the moment, rather than approved based on revenue alone and regretted later.

How Muhasib makes this visible

Because supplier cost is linked to every booking in Muhasib, gross profit — not just revenue — is visible the moment a booking is confirmed, letting agencies optimise for the metric that actually matters.

Tags

profitability per bookingtravel agency KPIsmargin vs revenue travel

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