Tern Moves Into Hotel Booking with Guaranteed Commissions, Promises Never to Act as Host Agency

Tern announced Thursday a major expansion into hotel distribution, introducing embedded hotel booking with guaranteed, fast-tracked commission payouts inside its platform.

The goal with the addition is to try to solve another of the industry’s “biggest pain points,” David Shull, CEO of Tern, told TMR this week.

It’s not the first time that Tern has added products directly into the platform—it already added tours and insurance late last year—but it’s the first time Tern is becoming the merchant of record for the products.

This hotel move puts Tern directly into the transaction and commission settlement layer, a first for the company, but something that Shull and the team thought was required if it really wanted to stick to its mission.

“When we launched our first booking integration in January, eliminating invisible work became our mission, and we couldn’t actually claim that in good faith if we didn’t touch booking,” said David Shull, CEO of Tern. “We saw the impact, looked at the next category, and decided hotels was the biggest pain point in the industry—from back-and-forth inefficiency to massive, unreliable commission payment problems.”

To start, the platform will offer global hotel inventory sourced through a B2B distribution partner, giving advisors access to real-time rates and availability across major hotel chains, boutique properties, and independent resorts worldwide. Rather than relying on a single bedbank or direct hotel contracts at launch, Tern’s wholesale integration allows advisors to research, compare, and book standalone nights or pre- and post-cruise stays directly within client itineraries.

How It Works: Shifting to Merchant of Record to Fix Commission Delays

To guarantee payments, Tern is taking on the role of Merchant of Record rather than acting as a traditional software affiliate.

Under the new model, Tern secures non-commissionable net rates through B2B distribution partners, charges the traveler directly, and bakes the advisor’s commission into the total rate collected. Because Tern holds the funds, it bypasses traditional hotel reconciliation backlogs entirely.

Tern will pay host agencies and primary credential holders their guaranteed commissions via bank transfer on the Friday immediately following client checkout. Even if an advisor books a hotel on Thursday, Tern guarantees the commission on that Friday.

“Hotels pay massive administrative overhead to process commissions, which adds no real value,” Shull said. “By managing the commission reconciliation process ourselves and holding the commission until checkout, we can pay the agency the following Friday while removing the payment burden from hotels.”

Alongside the booking engine, Tern is also introducing 24/7 client reservation support for bookings made through the platform, an AI-powered email marketing tool, and a mobile app for advisors.

Looking ahead, the plan is to go beyond just hotels. Shull confirmed to TMR that Tern plans to expand to include cruise bookings in 2027.

The Host and Consortia Dynamics

At rollout, bookings made inside Tern will not incorporate host GDS overrides, consortia preferred rate codes, or luxury amenity programs such as complimentary breakfast or room upgrades. Bookings also will not count toward an agency’s aggregate preferred volume tiers with major hotel brands.

To respect host agency structures, Tern requires host agency leadership or credential holders to explicitly opt into the program before their affiliated advisors can access hotel bookings. Credential holders must be verified with a W9, too.

“The credential holder has to decide if they want to make this program available to their advisors,” Shull noted, emphasizing that Tern has no desire to compete with host agencies. “Hosts and agencies are our partners.”

There are also no plans, now or ever, for Tern to be a credential holder. All bookings will go through the agency and Tern will not hold an IATA or CLIA number.

Grace Van Hollebeke, Head of Brand and Partnerships at Tern, acknowledged that while some agencies are excited to opt-in, others are taking a wait-and-see approach until direct supplier and consortia integrations are built.

“The overwhelming response from those holding off has been, ‘We’re very excited to opt in once we have the direct integrations in place,'” Van Hollebeke said. “Delivering on those consortia relationships is a major goal for us in the future.”

Shull added that Tern’s long-term goal is to build direct API connects with hotel brands to pass through diverse rate codes, consortia perks, and direct advisor-to-hotel communication.

“We have to prove our impact first,” Shull said. “We respect that we can’t just start a new distribution engine and instantly be preferred, but over time, bringing this demand.”