Inventory management in travel and hospitality refers to the process of managing perishable travel resources like hotel rooms, airline tickets, tour slots, and rental cars across different B2B and B2C channels. Unlike physical retail with unsold stock that can be in store and simply wait on a shelf, travel inventory is time-perishable: if a hotel room remains unoccupied for a night or if a plane takes off with empty seats, those inventory assets lose 100% of their value instantly.
The goal of inventory management in travel is to maximize sales and avoid overbooking at the same time. It requires real-time data flow between three essential systems:
Travel companies can distribute their inventory in two ways depending on their relationship with the distributor:
For large travel portals, it would be impossible to run a query on each supplier’s live inventory database for every user’s query without putting a significant load on the servers. To overcome this, inventory tech heavily depends on database caching.
Suppliers push inventory updates to a centralized cache server at regular intervals. This quick and local cache provides information for a traveler when they search for their trip. The system runs a live, real-time ping of the supplier’s master database only at the moment when the traveler clicks Book Now to make sure that the spot has not been booked by another traveler a second earlier.
Hotels add an attrition clause when a corporate group or destination wedding takes up a vast block of rooms. This legal contract entails that the group organizer must occupy a certain percentage of the rooms that are blocked out (usually 80% to 90%). Otherwise, they will be liable to monetary fines for unsold inventory.
Fenced inventory is when a supplier separates their travel assets by using specific booking criteria to target different consumer segments without cannibalizing retail profits. For instance, an airline could fence low-cost fares by requiring reservations for Saturday night or by taking a non-refundable deposit so that high-priced corporate travelers don’t fill the lower-priced inventory.
A Stop Sell is an emergency command run within a channel manager or CRS. It immediately blocks the sale of a specific inventory asset on all third-party platforms. The stop sell is executed by revenue managers when there is a sudden surge in demand or high occupancy or any unplanned maintenance in the system to prevent loss of inventory control.
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