An allotment is a fixed number of rooms that a hotel contracts to a tour operator, travel agency or wholesaler for a set period, usually at a net rate. The partner sells the rooms to its own customers. Rooms it has not sold by the agreed release date (often 7, 14 or 21 days before arrival) go back to the hotel, which can then sell them on other channels. Allotments give the hotel a base of business in advance and give the partner guaranteed availability to sell.
What is an allotment in hospitality?
In hospitality, an allotment is a contracted block of rooms that a hotel reserves for a partner, typically a tour operator or a travel agency, over a season or a set of dates. Unlike a room block for a single group or event, an allotment is sold room by room by the partner to many different guests. The contract sets the number of rooms per night, the room types, the rate, the release period and whether unsold rooms carry a penalty.
How does an allotment work in the travel industry?
The hotel and the partner sign an allotment contract before the season. The partner loads the rooms into its own system, sells them, often as part of a package with flights or transfers, and sends each booking to the hotel. The hotel tracks how much of the allotment has been used; at each release date, unsold rooms return to its general inventory. A "free sale" agreement goes further and lets the partner book without checking availability until the hotel closes sales. Guests booked through a partner are still the hotel's guests on arrival, which is why many hotels send them the same pre-arrival information as direct bookers once their contact details are in the PMS.
