Sales or revenue: who decides a group rate? A decision checklist for both teams

Sales owns the client and the volume; revenue management owns the price and the inventory. A group rate is proposed by sales, decided by the revenue manager against a displacement check, within limits the general manager sets, and answered within a written response time so the client is never left waiting.

The sales manager has the group on the phone, the revenue manager has the dates half full and a rate floor in mind, and the general manager settles it in the corridor on the way to lunch. The customer waits, and the answer depends on who caught the manager first. The revenue management vs sales hotel argument is old, but it is solvable with a page of paper. After reading this you will be able to write that page: one owner per decision, one response time, and one place where each decision is recorded.

Where do sales and revenue management pull apart?#

They pull apart because they are two different jobs with two different scorecards pointed at the same rooms. Sales is accountable for the business it wins; revenue management is accountable for what the whole hotel earns from the rooms it has.

Sales is measured on room nights, contract value and relationships kept. Revenue management is measured on rate, segment mix and net revenue across the month. A deal that lifts one number can lower the other, and both teams are right. The tension is structural, not personal: a salesperson who lets a group walk to protect a rate has failed at their job, and a revenue manager who fills the house at the wrong price has failed at theirs.

Three decisions cause most of the friction: group quotes, contracted corporate and agency rates, and inventory control, meaning stop sales, allotments and the last rooms. Almost every corridor argument is one of these three wearing a different coat. The damage is worst when no rule exists, because then every case is renegotiated from scratch by whoever is in the room, and the answer changes with the person rather than the facts.

Separate two questions that get mixed up: who owns the relationship, and who owns the number. Sales can own the client completely while revenue management owns the rate. The fix is not a truce but a written division of labour: one owner per decision, one response time per decision, and one place where the decision is recorded.

Who decides a group rate, and how fast?#

Revenue management decides the rate. Sales decides whether the enquiry is worth pursuing and what the client is promised, and the general manager decides only when the deal falls outside the written limits.

Run the request in a fixed order. Sales qualifies it first: dates, room-night pattern, shoulder nights, meeting space, food and beverage, cancellation terms, and whether the client has stayed before. Revenue management then runs the displacement check: what the same rooms would likely earn from other demand on those dates, what the group brings beyond the room rate, and how much of the block will actually materialise.

The answer goes back in one message: the rate, the conditions, the date the offer expires, and the date unused rooms return to inventory. A rate sent without conditions is not a quote, it is a promise the hotel will regret. A hold without an expiry date is free inventory: the client keeps the rooms while shopping elsewhere, and the hotel cannot sell them.

Set a response standard and apply it to the revenue manager as strictly as to sales. For example, one business day for a standard request and four working hours for a request arriving inside the same week. The number is the hotel's own choice; the point is that it exists and is visible to the client. Then tell the people who will be asked at the desk: reservations, front office and the restaurant. A rate agreed by two managers and unknown to the front desk becomes an argument at check-in.

The displacement check, in plain terms#

It compares two futures for the same rooms. In one, the group arrives, takes the block at the offered rate, spends on food, beverage and space, and cancels a share of its block. In the other, the rooms sell gradually to other demand at higher individual rates. The check estimates both, side by side, and the answer follows. It is a comparison, not a formula with one right answer, and the full method is covered in group displacement analysis: should your hotel accept the group.

What the quote must contain#

Who owns a corporate or agency rate?#

Sales negotiates the relationship and the volume commitment; revenue management sets the rate floor and the conditions, and the general manager signs anything that runs past the agreed limits.

Split every corporate deal into three parts and decide each one separately: the rate, the commitment the client makes in return, and the conditions, such as breakfast, cancellation ladder, last-room availability and payment terms. A discount without a commitment is a rate cut. A discount with a commitment is a trade. Before agreeing, ask what the hotel gets back: volume, shoulder-night fill, a longer stay pattern, or guaranteed off-season business.

For agency contracts, agree whether the arrangement is commission or net, the release period, the allotment and who may resell what. A rate that lives in an email rather than in the system will eventually be quoted after it has expired. Load the contract once, with start and end dates, so the system refuses to quote a rate outside its window; this removes a whole category of front-desk argument. Agree the renegotiation window in advance, for example if the committed volume is missed or the market has clearly moved. Without it, every renewal becomes a fight. The negotiation side is covered in more depth in agreeing corporate rates with companies.

Who can stop sales or release an allotment?#

Revenue management owns inventory control. Sales may request a release or a reopening, but it cannot close or open a date on its own.

A stop sale protects the last rooms for demand that is expected to pay more. That is a rate-and-inventory judgement, so it belongs with the team that holds the forecast. Allotments must return to inventory on a stated date: if the system can release them automatically, let it; if not, name the person who checks each morning and the time by which it is done.

Decide who may sell the final rooms and at what floor price. If sales can sell the last five rooms cheaply on the day, the revenue manager's forecast was fiction. Both directions carry risk: closing a date too early loses business that would have come, and leaving it open too long produces an oversale and a walk, which costs more than the room. Write down what the front desk is allowed to do when the system says closed and a guest is standing in front of them, because an unwritten exception is a rule that only some staff know. Review stop sales weekly rather than setting them and forgetting them; a date closed for a conference that later cancelled is revenue quietly lost.

Which numbers should both teams read?#

One forecast and one net-revenue-by-segment report, read weekly by both teams from the same definitions. Two reports with two definitions guarantee an argument about the numbers instead of the decision.

Revenue management owns the forecast, because the forecast covers every segment and every channel, not only the accounts sales manages. Sales contributes what only it knows: the pipeline, contract renewals at risk, and group enquiries in progress. That is an input to one forecast, not a second forecast. The method for building it is described in estimating the next 90 days from what is on the books.

Report net revenue by segment, not rooms revenue alone. A group that fills bedrooms but flattens the restaurant and the spa is not the same customer as a corporate account that pays more per room and eats out. Fix the definitions once and print them: what counts as a room night, whether the rate includes breakfast, how commission is treated, and whether cancelled nights are removed or shown separately. Read the numbers weekly, because a monthly report settles arguments after the money has already been lost.

Show the decisions next to the numbers: what was turned down, on what dates, and what happened to those rooms afterwards. That is how a team learns whether its rate floor is right. Read pickup and pace together, since one number on its own says very little about whether the hotel is ahead or behind.

What belongs on a one-page decision table?#

One row per recurring decision, with the proposer, the decider, the people who must be told, the limit that applies and the response time. If a decision is not on the page, it goes to the general manager.

Keep the limits in the table rather than in people's heads. Who may discount, by how much and on whose authority is a separate rule, covered in discount limits and override rules for hotel staff, but the table is where it becomes visible to both teams. The general manager signs the page and it is posted where both teams work, because a rule kept in a folder is a rule nobody follows. Review it quarterly: a table that never changes is a table nobody uses, since the market around it has moved. The empty space on the page is deliberate; anything not listed escalates, and that is a feature rather than a gap.

The table below is an example. Replace the roles, limits and times with the ones your hotel actually agrees to.

How do you settle a disagreement at the weekly meeting?#

With the written rule and a decision log, not with seniority. The meeting decides, the corridor does not.

Bring the case, not the grievance: the dates, the request, the displacement numbers and the alternative use of those rooms. An argument about principle cannot be settled; a case can. Decide in the room and write it down with a date and an owner, because the log is what stops the same argument returning in three weeks with different names. The structure of the meeting itself is described in the weekly revenue meeting agenda and decision log.

If the two teams still disagree, the general manager decides against the written rule, and then the rule is corrected. A decision that contradicts the table without changing it will be relitigated. Review turned-down business once a month, looking at what happened to the rooms that were protected; this is the only honest test of whether the rate floor is set correctly. Keep the meeting short and the same shape every week, so the discussion stays on decisions rather than on reporting.

Write the page this week#

Write the one-page decision table this week, with a proposer, a decider, the people to be told and a response time for each of the eight decisions above, and take it to the general manager to sign. The parts fit together as one mechanism: the table removes the ambiguity, the response time protects the client, the shared numbers remove the dispute about facts, and the weekly log stops the settled question from returning.