Allotment

Allotment is a pre-negotiated block of rooms that a hotel agrees to make available to a distribution partner — typically a tour operator, travel agent, OTA, or corporate client — for a defined period and at agreed-upon rates. The partner can sell these rooms without requesting availability on a per-booking basis, streamlining the reservation process for both sides.

Allotments are governed by a contract that specifies the number of rooms, the rate, the booking period, and a release date (also called a cut-off date) by which any unsold rooms revert to the hotel's general inventory.

Types of allotment

• Soft block (or free-sale allotment): The partner can sell rooms from the block, but the hotel can also sell the same inventory through other channels. Unsold rooms are automatically released on the cut-off date at no penalty.
• Hard block (or committed allotment): The partner guarantees payment for the entire block regardless of whether all rooms are sold. This carries higher risk for the partner but often comes with steeper discounts.

Example

A tour operator signs a soft-block allotment for 20 rooms per night at a coastal resort from June 1 to August 31 at a net rate of €85. The release date is 14 days before each stay date. If only 12 rooms are sold by the cut-off, the remaining 8 revert to the hotel for sale through other channels.

Why it matters

Allotments are a core mechanism in wholesale and group distribution. For hotels, they provide baseline occupancy and revenue predictability, especially during shoulder or low seasons. For partners, they guarantee availability without real-time connectivity — still important in markets where API-based distribution is not fully adopted. However, poorly managed allotments can lead to over-allocation (blocking inventory that goes unsold) or under-pricing if release dates are set too late, leaving the hotel with last-minute rooms to fill.

Related

• Wholesale / Net Rate — the pricing model most commonly used in allotment contracts
• Pickup — tracking how many allotment rooms have actually been booked
• Wash (Cancellation Wash) — the expected attrition on group or allotment bookings
• Channel Manager — helps hotels manage allotment inventory alongside real-time OTA availability