Allotments in the

tourism industry Tourism is travel for pleasure or business; also the theory and practice of touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tours. The World Tourism Organization defines tourism mo ...

are used to designate a certain block of pre-negotiated

carrier Carrier may refer to: Entertainment * ''Carrier'' (album), a 2013 album by The Dodos * ''Carrier'' (board game), a South Pacific World War II board game * ''Carrier'' (TV series), a ten-part documentary miniseries that aired on PBS in April 20 ...

seats or

hotel A hotel is an establishment that provides paid lodging on a short-term basis. Facilities provided inside a hotel room may range from a modest-quality mattress in a small room to large suites with bigger, higher-quality beds, a dresser, a ref ...

rooms which have been bought out and held by a

travel Travel is the movement of people between distant geographical locations. Travel can be done by foot, bicycle, automobile, train, boat, bus, airplane, ship or other means, with or without luggage, and can be one way or round trip. Travel c ...

organizer with a huge buying power like a wholesaler, tour operator or

hotel consolidator A hotel consolidator (also called a hotel broker) is a travel company (travel agency or tour operator) or business that buys up blocks of hotel rooms at a predetermined destination and then resells them as package holidays or at discounted rates to ...

, and more rarely by a retail

travel agent A travel agency is a private retailer or public service that provides travel and tourism-related services to the general public on behalf of accommodation or travel suppliers to offer different kinds of travelling packages for each destinatio ...

. Allotments can be purchased for a specific period of time such as a whole

season A season is a division of the year based on changes in weather, ecology, and the number of daylight hours in a given region. On Earth, seasons are the result of the axial parallelism of Earth's tilted orbit around the Sun. In temperate and pol ...

, part of a season or for any single dates and then resold to travel partners and final customers around the globe. A couple of days prior to carrier departure/hotel

check-in Check-in is the process whereby people announce their arrival at an office, hotel, airport, hospital, seaport or event. Office check-in Many offices have a reception or front office area near the entrance to greet or assist visitors arriving to a ...

any unsold seats/rooms may be released back to the supplier if such an agreement exists between the two parties. An allotment release back period is also negotiated as part of the allotment contract (e.g. four days prior to check-in/departure).

Negotiating allotments

Allotments can be negotiated between a tour operator and a travel service supplier such as airline company/hotel chain, or between two travel organizers such as a tour operator and a retail travel agent. Either way the buyer needs to prove a consistent level of business, because allotments are hardly granted without any previous sales history. Rooms or seats that have not been contracted between the travel company and the product supplier are handled as ‘on-request’, where each booking of an

airline seat An airline seat is a seat on an airliner in which passengers are accommodated for the duration of the journey. Such seats are usually arranged in rows running across the airplane's fuselage. A diagram of such seats in an aircraft is called an ...

or hotel room needs to be confirmed with the supplier before being confirmed with the client.

The allotment or allocation contract

The amount of the contracted rooms/seats to be specified in the allotment contract is a result of the estimated, during the negotiation, volume of sales to be realized by the

tour operator A tour operator is a business that typically combines and organizes accommodations, meals, sightseeing and transportation components, in order to create a package tour. They advertise and produce brochures to promote their products, holidays and ...

. Tour operators book a certain number of rooms in hotels or seats on carriers and have the right to use them by a given date, also known as a release date, that usually is some days prior to

tourist Tourism is travel for pleasure or business; also the theory and practice of touring, the business of attracting, accommodating, and entertaining tourists, and the business of operating tours. The World Tourism Organization defines tourism mo ...

's arrival (hotels)/departure (carriers). The allotment contract reduces the risk of any unsold products by the supplier and grants relative price advantage to the travel organizer helping him to stay competitive on the market by offering extra

discounts Discounting is a financial mechanism in which a debtor obtains the right to delay payments to a creditor, for a defined period of time, in exchange for a charge or fee.See "Time Value", "Discount", "Discount Yield", "Compound Interest", "Efficie ...

. Tour operators obtain discounts, through allotment or commitment contracts, primarily depend on the firm size and the bargaining power exercised; they can vary from 10% to 50% according to the period of the year, the destination, the quantity and quality of services contracted upon. Some big tour operators are able to obtain up to 70% of discount.

References

Hospitality industry Tourism Travel agencies Hotel terminology {{tourism-stub