STO- and Rack Rate

STO and Rack Rate                

Rack Rates - What are they?
Rack Rate is a term used to describe the nightly rate that a traveler will pay if they choose to deal directly with a camp, hotel owner or other supplier, instead of booking the accommodation through a travel agent.  While some suppliers in the safari and African travel industry will gladly deal directly with a traveler, many are not equipped to do so (inadequate direct booking departments and staff) and so prefer to have agents handle all bookings.  As such, if the traveler deals directly with the supplier, they will typically be charged the rack (or published) rate.

STO   ( Sell to Touroperator )                        
Service Providers quotes to agents as an STO (sell to Tour Operator) rate.  This is simply a rate discounted below Rack rate.  Agents are then supposed to quote clients AT OR ABOVE the Rack Rate / Suggested Selling Price. The difference between the STO rate and the Rack / Selling Price quoted to a client is the agent's profit (before subtracting all its own expenses).  Generally, the more business an agent provides to a given supplier, the better the STO rate that agent will receive.

A Service Provider's quote to an agent may not break out charter flying and transfer costs separately.  This is especially true for Service Provider who own their own charter flight companies, and package camp rates and flying costs together.  Furthermore, there may be price breaks for a booking staying a certain number of nights in a supplier's camps, in which case, specific nightly rates, by camp, become further blended.