WHAT IS A SELL LIMIT?
To understand how to use sell limits to
their best advantage, it’s important to first fully understand what they are
and why we use them. The concept of a sell limit is common in the hospitality
industry and revolves around the selling of a limited number of rooms in a
combination of room/date at a certain rate. It can be a single rate or a rate
group. In a rate group, every rate that is contained within that rate group
will contribute to reaching that sell limit. For example, you might say “I will
only sell 10 rooms at this rate,” or “I will only sell 10 rooms in this rate
group.” Whatever way you choose, whenever you reach the limit on that rate or
rate group, then inventory is no longer sent out through your distribution
channels. That rate and/or rate group has been exhausted and will stop selling
automatically. Because they allow a great amount of control for ADR, sell
limits are a crucial part of every hotel’s demand strategy.
A COMMON SITUATION
However, though most distribution channels
accept inventory on the normal room/date/rate combination as a single rate,
many do not accept that combination for a rate group. And the opposite may
happen in other channels. Some OTAs might take inventory messages only per room
type, so setting a sell limit might restrict other rates that you might still
want sellable.
If your distribution technology does not
support both rate and rate group sell limits, you must set individual sell
limits for every rate, or close a room too early. Unfortunately, doing sell
limits this way can often shut out opportunities that you originally didn’t
intend to shut out. Though not ideal, there is another solution—but only if
your technology supports it.
WORKING WITHIN YOUR TECH
To work around the lack of rate group
recognition, check that your technology is able to at least translate this
situation in a way that does not lead to lost booking opportunities. In other
words, instead of it sending a typical inventory message of “zero inventory,”
it will instead translate that information into a less problematic
“availability restriction” message, which will lead to chances for alternate
bookings.
The bottom line? The best way to go would
be to have your technology support rate groups in your sell limits. If that
cannot be done, at the very least, make sure that it delivers a restriction
message instead of a zero-inventory message. But whichever way you go, just
make sure that your technology supports and fits into your best demand strategy
for your particular hotel.
Visit SHR website for more information.