A hotel allotment is a block of at least five pre-negotiated hotel rooms that have been bought out and held by a customer transacting on behalf of a large group, usually a travel organizer with a huge buying power, such as a tour operator, wholesaler or hotel consolidator.
NB: This is an article from Lighthouse
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In some circumstances and depending on the booking engine and customer interface you use, they can be bought by customers in different categories, such as a company PA booking dozens of rooms over several nights for dozens of their colleagues.
Whether they’re classed as ‘tour operation allotments’ or other more standard types of allotment is something that you should make clear on your internal systems so that you and staff at your hotel are all on the same page. The economics operate on the same principle but how you market and sell these options might vary.
There’s a clear benefit to hotels: guaranteed revenue with a high ticket price, albeit with lower profit margins. Promoting allotment and facilitating these sales is also good for winning business in the first place and increasing the chance of repeat bookings.
The issue of allotments – and group bookings more generally – overlaps with the topic of displacement analysis, but our focus here is on how to make them work, not on whether you should or shouldn’t take the booking.
The two types of allotments: fixed vs call-off
We’ve discussed the two types of customers. Now, let’s look at the two types of allotments: fixed and call-off. You might also encounter these referred to as hotel-driven and guest-driven allotments, respectively.
As the name implies, fixed allotments require the booker to pay upfront for a fixed number of rooms on an agreed set of dates for a fixed price. It’s then up to them to allocate them to individual guests.
Call-off allotments are slightly more complicated. As the buyer, you’d agree with the hotel on a price per room for a block of rooms of certain room types over an agreed set of dates, but it’s up to each individual guest to reserve their own room at that agreed room rate. A cut-off date by which rooms must be booked would apply, after which any untaken rooms would go back on the open market.
Because the latter offers more flexibility to the guest, hoteliers can – all things being equal – usually charge slightly more per room. But with the former, you’re guaranteed the price you agree.
