Contribution Margin
The economic contribution remaining after channel acquisition, commission, payment, servicing and relevant variable costs are deducted from revenue.
Why it matters
Measurement terms are unreliable without explicit numerator, denominator, attribution window and booking-lifecycle definitions. The same 'conversion rate' can mean search-to-booking, click-to-booking or stayed-booking across teams. KPI contracts should be explicit from event collection through financial reconciliation.
What does it look like in practice?
A 3% conversion rate is only meaningful if the denominator and booking lifecycle state are explicit. Metric contracts belong together with event and reconciliation rules.
Implementation questions
- What are the numerator and denominator?
- What is the attribution window?
- How are cancellations and modifications applied?
- Is the metric reconciled with commercial reports?
Common mistakes
- Omitting numerator/denominator
- Treating recent gross bookings as matured revenue
- Hiding attribution-window rules
Where does it appear in the travel stack?
Contribution Margin commonly appears across measurement layers. Its implementation should make source-of-truth, identity, freshness and transaction-ownership boundaries explicit.
Related terms
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