Revenue Management
Allotment
Inventory contractually allocated to a channel or partner ahead of sale.
Academic definition
An allotment is a block of room inventory contractually allocated to a specific channel, partner, or account — such as a tour operator, wholesaler, corporate account, or online travel agency — for them to sell, often under agreed rates and a release period. The release period specifies how far before arrival unsold allotment rooms return to the hotel's general inventory, limiting the risk of holding rooms for demand that does not materialise. Allotments guarantee partners access to inventory and can secure volume, but they commit rooms that might otherwise be sold to higher-value demand, creating displacement risk on strong dates. They also carry wash, since allotted rooms are frequently not fully picked up. Managing allotments involves balancing the value of guaranteed partner volume against the flexibility and potential yield of retaining inventory for dynamic sale, and setting release periods that recover unsold rooms in time to resell them.
Worked example
A hotel allots 15 rooms a night to a tour operator at a fixed rate with a 7-day release; on a date that later surges, those committed rooms displace higher-retaining direct demand the hotel must now turn away.
The ProfitPAR™ lens
An allotment is a standing promise of rooms to a partner, and every promise carries an opportunity cost the hotel rarely prices properly. Inventory committed to a wholesaler or OTA at a fixed rate is inventory unavailable to higher-retaining demand, and if the partner does not pick it up, it washes — held empty for a sale that never came. ProfitPAR™ reads allotments through both leaks at once: the displacement of better-retained business and the wash of rooms held in vain. The discipline is in the release period — pull unsold allotment back to dynamic, higher-margin sale early enough to fill it. An allotment is only worth its commitment if the volume it guarantees out-retains the demand it displaces.
Rooms promised to a partner are rooms unavailable to the demand that would have kept more.
Measure what each room actually keeps.
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Request an InvitationWorked examples use illustrative figures in Indian Rupee (₹) with lakh/crore conventions. They are composite and representative, not drawn from any single property. ProfitPAR™ is a trademark of Sibasish Misra.