Hotel distribution terms explained: contracts, rates, channels

Hotel distribution terms are the shared vocabulary hotels, travel agencies and booking sites use to describe how rooms are held, priced and sold: allotment, free sale, release, stop sale, net rate, parity, rate plan and mapping. No standards body defines them, so each contract has to define its own.

A contract arrives with one line: ten rooms on allotment, release seven days, free sale after. The reservations manager reads it as ten rooms held until seven days before arrival. The agency reads it as ten rooms it may return until seven days before arrival. Both are reading the same sentence, and only one of them will be right on the night. After reading this article you will be able to read a distribution contract, a rate sheet and a channel setup with one vocabulary, and spot the words that are doing no work.

Why do hotel distribution terms cause so many disputes?#

Because the vocabulary is borrowed, not defined: no authority has fixed what each one means. There is no official definition of allotment, release period, free sale, stop sale, on request, guaranteed allotment, net rate or markup. Treat every entry in this article as industry practice, not law.

The same word carries three readings. The hotel hears an obligation, the agency hears an option, and the booking site hears a field in a system that must be filled with a number. A term can live in three places at once: the signed contract, the sales team's habit and a field in the hotel's system. When the three disagree, the system wins silently, because it is the one that sells the room.

The practical fix is boring and effective: one term, one meaning, written once in the contract's definitions clause and used with that meaning in every email, rate sheet and system field. Words that describe software, such as property management system, channel manager and booking engine, belong to a technology glossary; this one covers the commercial vocabulary that sits on top of them. When a term is unclear, the question to ask is not what it means in general but what it obliges each side to do on a specific date. Keeping one inventory across every channel reduces the places where a definition can drift.

What is the difference between allotment, free sale and on request?#

Allotment means rooms are held for a named buyer until a deadline; free sale means the buyer may sell any room the hotel still has; on request means nothing is held and each booking waits for the hotel to confirm.

Allotment (Turkish usage: kontenjan) is a block of rooms set aside for one buyer for a set period. The hotel cannot sell those rooms to anyone else while the block stands, which is the whole point and the whole cost. Release is the deadline by which unsold allotment rooms return to the hotel; it is meaningless without a time and a time zone. "Seven days before arrival" at 18:00 is a different contract from "seven days before arrival" at midnight.

Free sale (serbest satış) commits the hotel to accept bookings from that buyer as long as inventory exists, so the hotel keeps the rooms but loses control over who gets the last one. On request (talep üzerine) holds nothing: the request arrives, a person or a system checks availability, and the guest waits. It protects inventory and costs conversion, especially outside office hours.

"Guarantee" is the most misread word in the group. Guaranteed allotment means rooms are held, while a guaranteed reservation means a late cancellation or no-show is billed. A contract that says "guaranteed" without saying which one is a dispute waiting for its date.

For example, a hotel gives an agency ten rooms on allotment with a seven-day release. If the agency sells six and returns four on day eight, the hotel has lost the chance to sell those four rooms and has no basis to charge for them.

What do stop sale, close-out and closed to arrival actually close?#

Each one closes a different thing: stop sale closes the sale of a room or rate for dates, close-out closes the property or a room type, and closed to arrival blocks new arrivals on a date while guests already in house still stay.

Stop sale is a switch on selling, not on existing reservations. A booking already confirmed for those dates still stands, and staff who read it as a cancellation will walk guests who are entitled to a room. Close-out usually means the property or a room type is shut for the dates, which is an operational decision, such as refurbishment or seasonal closure, rather than a yield decision.

Closed to arrival allows a stay that spans the date but not a stay that begins on it. It is how hotels protect a full night against one-night gaps without turning away longer bookings. Minimum stay forces a longer booking to be accepted, and it should always be paired with a decision about shorter requests, because a channel that cannot sell the minimum will show nothing at all.

Overbooking is not a channel setting. It is selling more rooms than the hotel can honor, and it becomes visible only when the channels stop agreeing with each other, which is why double bookings across channels have causes worth studying separately. Before closing anything, write down the reason and the review date; a stop sale left on after the reason has passed is one of the quietest ways to lose a week of revenue. The mechanics of when to close a channel and how deserve their own reading.

What is the difference between a net rate and a commissionable rate?#

A net rate is what the hotel keeps per room night; a commissionable rate is the price the guest pays, from which the agency's commission is later deducted.

Markup is the amount an agency adds on top of a net rate to reach its selling rate. The selling rate is what the traveler sees, and it is the only one of the three the guest ever meets. The difference decides who carries risk: on a net deal the hotel is paid its figure and the agency carries the margin, while on a commissionable deal the hotel carries the collection and the commission.

Currency belongs in the same sentence as the rate. A net rate in one currency with a selling rate in another needs a stated conversion rule and a stated date, or the two sides will disagree about the same booking.

Parity is the clause that ties these prices together. A 2017 report by the European Commission and ten EU national competition authorities (opens in a new tab) describes wide parity as obliging a hotel to give an agency its lowest prices and best availability against all channels, and narrow parity as allowing lower prices on other online agencies and offline channels while still restricting the hotel's own website (European Commission, 6 April 2017).

In Türkiye, the Competition Board ruled on 5 January 2017 (decision 17-01/12-4) that price and room-availability parity clauses and best-price guarantees in a major online booking platform's contracts infringed Article 4 of Law No. 4054 and fined the platform (Rekabet Kurumu, 5 January 2017 (opens in a new tab)).

For example, a hotel quotes an agency a net rate of 80 and the agency sells at 100. The guest sees 100, the hotel books 80, and any clause about who may advertise 90 is a parity question, not a rate question.

What is rate plan mapping and why does it break?#

A rate plan is a named combination of room type, board, cancellation rule and price, and mapping is telling a system which of your rate plans corresponds to which code on a channel. It breaks when the two sides stop describing the same product.

Board matters as much as price. A room-only rate mapped onto a half-board code sells a breakfast the hotel never priced, and the loss appears at checkout, not at booking. Cancellation rules travel with the rate plan; a flexible plan mapped onto a non-refundable code produces refund arguments that the hotel usually loses, because the guest has the confirmation in writing.

Mapping must be tested with a real booking, not by looking at a screen: book, check the rate and policy that arrive in the hotel's system, then cancel and check that the room returns. The detail of channel manager mapping: room types, rate plans and testing extends this section.

Metasearch sites are comparison surfaces that display rates and send the traveler to a booking page; they do not hold inventory, so a wrong rate there is a mapping or feed problem, not a metasearch problem. One room inventory feeding the hotel's own website, agencies and booking sites is the aim; every extra place where a rate is typed by hand is a place where the versions can drift apart. Name rate plans so a stranger can read them: room type, board, policy and audience in the name beats a code that only the person who created it understands.

How do you write these terms into a contract so both sides read them the same way?#

Define each term once, in the contract, with a number, a time and a consequence attached, and make sure the system field that sells the room carries the same meaning.

Put a definitions clause at the front and use those words with those meanings everywhere else, including rate sheets, emails and system fields. Attach a time and a time zone to every deadline: release, cancellation, no-show and payment dates all need an hour, not just a day. State the consequence, not only the rule: what happens to unsold allotment, who is billed for a no-show, and what the hotel owes if it cannot honor a confirmed booking.

Check who you are contracting with. Under Law No. 1618 (opens in a new tab), a travel agency is a commercial organization authorized to arrange accommodation, transport and tour services, and Article 4 requires an operating certificate (işletme belgesi) from the Ministry of Culture and Tourism (mevzuat.gov.tr, consolidated text, 1 November 2026). Since an amendment to the Travel Agencies Regulation published in the Resmî Gazete on 26 July 2024 (opens in a new tab), agencies must verify accommodation facilities' certificate numbers through the Ministry's database and show them in sales and marketing, and may not market or sell facilities that have no certificate (Resmî Gazete, 26 July 2024, No. 32613).

Know where the consumer sits. Under Article 51 of Law No. 6502 (opens in a new tab), a package tour contract combines at least two of transport, accommodation and other tourism services at an all-inclusive price and lasts more than 24 hours or includes an overnight stay (mevzuat.gov.tr, consolidated text, 1 November 2026). The hotel's counterparty is the agency, and the agency's counterparty is the traveler. Have a legal adviser read the final text; this article describes practice and does not replace that reading.

What to do next#

Take the agency contract you are working from today and mark every term in this glossary that it uses without defining. The four groups fit together in one document: contract terms decide what is held, availability terms decide what is closed, price terms decide what the hotel keeps, and channel terms decide where the room appears. Define the missing ones, with a time and a consequence, before the next rate sheet goes out.