Allotment: rooms held for an agent to sell, and how the contract works

VisitEngland's glossary for the travel trade defines an allotment as a number of rooms, seats or vehicles agreed in advance and held by a wholesaler or inbound tour operator for sale.

Within its allotment, and before the release date, the agent can confirm a booking at once without asking you. That is what it buys: rooms it can count on for the trips it has sold, at a price fixed before the season.

Allotments are agreed with tour operators abroad, destination management companies, wholesalers and travel agents in India, and sometimes with companies for their staff.

• An ordinary allotment: rooms held until the release date and paid for only when booked. The agent carries no cost for rooms it doesn't sell; the hotel carries the cost of holding them.
• A committed allotment: the agent pays for the rooms whether or not it fills them, often in return for a lower rate. A paper for the International Bar Association on hotel contracts in Greece sets the two side by side: where the operator commits to a fixed number of rooms, it pays for every one, sold or not, while under an allotment contract it owes nothing for unsold beds once it reaches the agreed monthly minimum.
• Free sale, or free sell: no set number of rooms, but the agent may confirm bookings until you tell it to stop. VisitEngland's glossary describes rooms given this way in unrestricted quantities until otherwise indicated, so a booking can be confirmed to a client at once.
• Block space: some consortia programmes ask for a block of rooms held for them even on sold-out dates, D-EDGE's guide to those programmes says.

The IH&RA and UFTAA code of practice between hotels and travel agents comes with a model allotment contract. Its parts make a good list of what to agree:

• The seasons and their dates, and the number of rooms of each type held in each.
• The prices for each season, by meal plan (room only, with breakfast, half board, full board), with supplements for a single, a view or an extra bed, and whether they are net or carry a commission.
• How many days before arrival the final rooming list is due in each season, after which the hotel may give unconfirmed rooms to others.
• That every booking carries each guest's full name, and that names can change only before the release date.
• The deadlines for cancelling in each season, and what is owed after them. The model contract sets the compensation for each booking cancelled after the deadline at the package rate for three nights, unless force majeure is proved.
• A revision clause: if the agent's rooms fill below an agreed level in the low season, the hotel may reduce or cancel its high-season allotment.
• What the agent may print about the hotel: the description and photos in its brochure must match the hotel and be approved by its management.
• Payment, before arrival, by deposit and invoice, or on arrival; and that the hotel may treat a contract the agent hasn't signed and returned as void, and free the rooms.

Each allotment has a release period: a number of days before each night by which the agent must have booked the rooms it wants, after which the rest come back to you. Hotel software does this on its own. The help for SIHOT, a property management system, says that when an allotment's release period is reached, the allotment is cut to the bookings confirmed that day.

Bookings the agent sends after the release date, or beyond its allotment, are yours to accept or not by what you have left, as the IH&RA and UFTAA model contract puts it.

The question at the season's end is not only how many rooms the operator filled, but how many of the rooms it held you could have sold yourself, and at what price.

• Keep allotments off your busiest nights, or give those nights a longer release period, so that rooms come back while you can still sell them.
• Set each agent's rooms up in your property management system as a block of their own, so they aren't sold twice.
• Read each agent's pick-up each week: rooms booked against rooms held, for each coming night.
• Ask for names before the release date, not on it. An agent with a full allotment and no names is guessing.
• Review each allotment at the season's end against what it filled, and offer fewer rooms to the agents that hold more than they sell.
• Keep the net rate private: agree in writing that it is never shown to the public on its own.