Did you sell out too soon?

Your property has reached 100% occupancy and it is still a few weeks before the arrival day. Do you feel satisfied with the result or worry about potential revenue loss? Without accurate knowledge of unconstrained property demand it is difficult to exactly forecast the demand potential for your property.

If your historical demand indicates that there was no further demand for your property after this sell out point in time then you could say job well done however traditionally we know that our booking curves continue to grow the closer to arrival and our industry is made up of early and late booking markets.

The risks of selling out to early is High Rate Spill and this is a silent revenue thief as is the reverse, Low Rate Spill. High Rate Spill is when we sold out too early at lower rates and didn’t protect enough for higher yielding demand.

Also if the sell out data is a night in isolation their will certainly be revenue losses on the surrounding days across the week.

It may be that you secured a group business that brought in additional catering revenue as well. However did the total piece of this business yield more profit than if we had sold the rooms to the transient demand, in addition the sell out this business caused if not placed correctly will certainly have displaced other transient revenue across the week.

Manually we can observe historical booking curve trends by segment and make estimates as to what we have potentially displaced by selling out too early.

Ideally by applying accurate forecasts per segment and utilising the right mix of inventory restrictions driven by demand patterns, revenue management is the process that will prevent selling out too early if higher yielding demand exists.

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