The two models, in one line each
- Allotment: you hold a block of rooms or seats at a contracted rate, with a release-back deadline by which unsold inventory returns to the supplier.
- Free-sale: you sell against live availability at prevailing (often dynamic) rates, with no commitment and no block to clear.
When allotment wins
Commit a block where availability or price is the real risk:
- Fixed departures and series groups, where you need guaranteed inventory on specific dates.
- Peak-season, high-demand properties that sell out — here availability itself is the scarce thing.
- Routes where your contracted net rate sits meaningfully below the live rate, so the block also protects your cost.
When free-sale wins
Stay uncommitted where demand is uncertain or rates are already soft:
- Ad-hoc FIT business you can't forecast.
- Shoulder and low season, when live rates are competitive anyway.
- New product you're testing and don't yet want exposure on.
Release deadlines are where margin leaks
The release-back date is the hinge of the whole arrangement. Hold too long on unsold allotment and you either eat attrition/cancellation terms or dump inventory late at a discount. Track release dates with the same discipline as payment due dates — set an internal alert a few days ahead of each one so the decision to sell, extend or release is deliberate, not a surprise.
Most operators blend the two
A common pattern: hold a small core allotment for the dates you're confident of, run free-sale on everything else, and top the block up only when pickup justifies it. You get guaranteed inventory where it matters without carrying the risk of a large unsold block.
Pin these down in the contract
- Net vs commissionable rates, and exactly what's included.
- Release period and the cut-off time, in the supplier's timezone.
- Cancellation and attrition terms on unsold rooms.
- Stop-sell mechanics, and whether unused allotment rolls forward or simply lapses.