Distribution Currency - How do Custom Conversion Rates work

Lorena Pamplona

Updated December 20, 2023 02:44

Find here an example on how the custom conversion rate will be applied to send the rate to the channel and how it will be received when the booking is imported.

How Custom Conversion Rate works when sending the rate to OTA and receiving the booking

Let's use an hypothetical scenario:

Your Cloudbeds PMS default currency is RSD
Your Booking.com account currency is EUR
You have set up the distribution currency for Booking.com in Cloudbeds PMS to EUR
You have set up a custom conversion rate where 1 RSD = 0.0083333334 EUR

1. Sending the custom conversion rate

If your room costs in Cloudbeds PMS 3,840.00 RSD and the custom conversion rate is 1 RSD = 0.0083333334 EUR:

Then the room rate will be 3,840.00 RSD = 32.000000256 EUR.

Meaning that, the price sent to booking.com will be 32 EUR.

Note that the OTA will still apply the automatic conversion rate if the guest selects a currency different from your hotel default currency. And it's not possible to control OTAs conversion rates from our side.

For example, the guest will book not in EUR, but in USD. The channel will convert the rate to $36:

2. Importing the booking after using a custom conversion rate

Still in the same scenario:

The guest made the booking for 32 EUR in Booking.com but in USD currency;
Booking.com will convert again the booking from 36 USD to EUR with their conversion rate, and will send 32 EUR to Cloudbeds PMS;
Cloudbeds PMS will convert the booking rate sent by OTA back to RSD, but applying again the automatic conversion rate;
After the automatic conversion, the booking will be displayed in Cloudbeds PMS with the Sub Total 3810.96 RSD (that differs from original room rate 3,840.00 RSD).

Meaning that the custom conversion rate only applies for sending updates to the channel, not for importing bookings. When the booking is imported the system will apply again the automatic conversion rate.

There are reasons why Cloudbeds PMS does not apply custom conversion rate when importing the booking:

Most of OTAs do not allow custom conversion rate and use automatic one, mostly because the guest will check the conversion rate in other sources while making the booking, and may not be aware of your custom rates;
While testing if applying a custom conversion rate would work to import the bookings, it was noticed that there would be still a difference between the original room rate and the room rate imported from the OTA if the guest decided to book in a different currency available as an option in the channel - as the example above mentioned.

The different between rates would happen since the channel uses other conversion rate source. Plus, the conversion rate of USD to EUR on the OTA is controlled by OTA themselves, and not by Cloudbeds PMS.