We use our happyhotel lexicon to present the most common terms in our sector, the hotel industry. Today we are looking at the meaning of “allotment”.
Term and subdivisions
The literal meaning of the term is allocation / distribution.
In the hotel industry, the term means a contingent, so to speak: it indicates the number of rooms in a blocked booking (subdivided by days or room types, for example). These bookings are usually made by tour operators, travel agencies, OTAs or event organisers.
Two types of allotments
There are generally two possible types of allotments: Call-off or fixed allotments.
In the case of a call-off allotment, e.g. an event organiser blockes rooms in the hotel in advance. Each individual guest (e.g. participant of an event) then books his or her own room under a keyword. After a mutually agreed return time between the organiser and the hotelier, the remaining rooms are taken out of the contingent and go on sale.
With a fixed contingent, the organiser books a fixed number of rooms in advance. A requirement, of course, is that he knows the exact number of participants. For the hotelier, this makes planning and also his pricing of the remaining rooms easier.
Advantages for both parties
The allotment or contingent contract reduces the risk of unsold rooms for the hotelier and gives the contractual partner (e.g. tour operator) a price advantage. This helps him to remain competitive in the market by being able to offer additional discounts.
The discounts that tour operators receive depend primarily on the size of the company and the negotiating potential of the contractual partners. They can fluctuate depending on the season, quantity and quality of the contracted services.
Outside the classic hotel industry, there are of course allotments in other areas of the travel industry as well. For example, seats on planes can also be booked in advance via allotments and thus blocked for an organiser.