Hotel net rates, allotments and release periods, demystified

"Hotel se rate kaise le" is the question every new operator asks in every Telegram group, and the answers they get back are usually half right. Someone says ask for commission. Someone else says get on a B2B portal. A third person swears by direct allotments and won't explain why. All three are describing real, different ways of buying hotel inventory in India, and mixing them up is how first-time contractors get burned in peak season.

There are exactly three models: commissionable rack rates, net "cut-and-pay" B2B rates, and seasonal allotment contracts. Each has a different margin structure, a different risk profile, and a different way it can go wrong on you. This post walks through all three, plus two clauses that decide whether an allotment protects you or ruins your Diwali week: release period and blackout dates.

The three ways you actually buy hotel rooms

Commissionable rack rate. The hotel gives you its published rate and pays you a commission on it, typically 10-25% on hotels (DMC Quote, 2026). That's a good baseline if a property won't offer anything else. You book at the hotel's listed price, invoice your client at that same rate (or a small markup on top), and claim commission back from the hotel later, usually against a credit note or on a monthly cycle. This is the slowest-paying, least flexible model, and it's what most small hotels default to if you don't ask for anything else.

Net rate (cut-and-pay). The hotel quotes you a flat "net" number (no commission language at all) and you decide your own sell price on top. A ₹4,000 net rate sold at ₹5,200 is your ₹1,200 margin, full stop, no waiting on a credit note. This is how most B2B hotel rate portals in India operate: you see net rates for hundreds of properties, mark up as you like, and pay the net amount at booking or checkout. It's the fastest model to work with and the easiest to price consistently, which is why most agencies end up buying the bulk of their FIT hotel nights this way once they've outgrown calling properties one by one.

Allotment contract. This is a pre-negotiated block of rooms, say 5 rooms a night through the season, held for you at a fixed net rate, with a contractual release period (also called a cut-off) that returns unsold rooms to the hotel a set number of days before arrival. That release clause is what caps your risk on unsold inventory (Xotels glossary); without it, an allotment is just a hopeful phone call. Allotments are worth pursuing once you have real, repeatable volume into a destination. A handful of rooms a month during Manali or Munnar season is a different conversation with the hotel than a one-off booking.

Model	How margin is made	Speed of payout	Best for
Commissionable rack	10-25% commission, claimed later	Slow (credit note cycle)	Ad hoc bookings, no volume yet
Net rate (B2B portal)	You set the markup	Immediate, at booking	FIT bookings across many destinations
Allotment	Fixed net rate, your markup	Immediate, at booking	Repeat volume into one destination/season

None of these is objectively "better": they answer different questions. Commissionable rack rate is what you get by default with no leverage. Net rates are what you get by shopping a portal or negotiating directly. Allotments are what you get by proving volume. Most agencies run all three simultaneously depending on the property and the season.

What "release period" actually protects you from

The release period (or cut-off date) is the single most important clause in an allotment contract, and it's the one first-timers skip past to get to the rate. It says: if you haven't confirmed/named guests for your held rooms by X days before arrival, the hotel takes them back and sells them to anyone.

Example: You hold an allotment of 6 rooms a night in Manali through the May–June season, release period 7 days. It's June 3, arrival is June 10. If you haven't confirmed and named the guests for those 6 rooms by June 3, the hotel releases whatever's unsold back into open inventory on June 3 evening. You can still ask for them after that, but only if the hotel hasn't sold them to someone else at a higher walk-in rate.

A short release period (2–4 days) is good for you if your bookings tend to confirm late, because you're holding the rooms almost until the last moment. A longer release period (10–14 days) is good for the hotel and riskier for you, because you're committing to fill rooms well before most Indian leisure bookings actually confirm. During May–June in the hills, hotels tighten release periods because they know they can sell every room walk-in. That's exactly the season the peak-season playbook for hill stations exists to help you plan around.

Careful: "Release period" and "cancellation policy" are not the same clause. Release period governs the block: unsold rooms in your allotment. Cancellation policy governs an individual confirmed booking you've already named a guest against. Read both separately; a hotel contract that's generous on one can be brutal on the other.

Blackout dates and how to spot them before you sign

Blackout dates are windows where your negotiated rate or allotment doesn't apply at all: usually major festivals, long weekends, and local events (a wedding season peak, a religious fair, New Year's Eve). During a blackout, the hotel reverts to rack rate or refuses new allotment bookings outright, even inside your contract period.

Ask for the blackout list in writing before you sign, not after your first quote falls apart in December. A hotel that won't commit a blackout list to paper is telling you, indirectly, that it reserves the right to invent one whenever it suits them. That's a red flag worth pricing into how much volume you promise them.

Negotiation scripts that get you past rack rate

Most hotels won't offer net rates or allotments to a walk-in enquiry. You have to ask for the right thing, in the right order, and back it with something real.

1. Open with volume, not rate. "We're doing roughly 8-10 room-nights a month into [destination] through [season]. What's your best net rate for that kind of volume?" Leading with a number, even an honest estimate, moves the conversation past rack rate immediately.
2. Ask for net rate before commission. If the hotel's default answer is a commission percentage, ask directly: "Can we do this as a flat net rate instead, so we can price it ourselves?" Many properties will convert on request: they'd rather quote once than manage credit notes.
3. Ask about allotment only after 2-3 confirmed bookings. Once you've actually sent business, ask: "We've sent you six room-nights this quarter. Would you consider holding a small block for us next season?" A track record is the only thing that gets a hotel to commit rooms in advance instead of selling on-demand.
4. Negotiate release period explicitly. Don't accept the hotel's first offer. "Can we do a 3-day release instead of 7? Our bookings usually confirm inside that window." Hotels expect this ask; it costs them little if your fill rate is decent.
5. Get the blackout list and meal-plan definitions in writing before advance payment. Verbal promises about "no blackout for you" evaporate the moment a wedding party books the whole property.

A rule of thumb: 10+ room-nights is what gets you direct contracts

Hotels don't extend allotments on faith. They extend them on a pattern they can forecast. In our experience, a reasonable rule of thumb is that ten or more room-nights a month into one destination is enough to get a small-to-mid hotel treating you as a repeat account worth reserving stock for, rather than a one-off enquiry to quote and forget.

Example: Say you're sending a Manali property 3 room-nights a month right now, spread across random FIT bookings. That's not a pattern the hotel can plan around. It looks like noise. Grow that to 10-12 room-nights a month (roughly one small group or 3-4 FIT bookings a week) and you have something to walk in with: "We did 34 room-nights with you last quarter. Can we talk about a block for next season?" That conversation gets you a net rate and a release period. The earlier conversation, at 3 room-nights, usually just gets you the standard commission.

If you're not sure what your actual room-night volume into a destination looks like, that's usually a sign your costing sheet isn't tracking supplier-level detail. Worth fixing before your next negotiation, so you're walking in with a real number instead of a guess.

The one-page hotel contract checklist

Before you sign or verbally agree to any hotel arrangement (rack, net, or allotment), get these in writing, even if it's just a confirming email:

• Meal plan definition, spelled out. "MAP" and "CP" mean different things to different hotels. Confirm exactly which meals, for how many guests per room, and whether soft drinks/alcohol are included.
• Check-in guarantee. What time is guaranteed check-in, and what happens if your guest arrives before it: held room, or wait?
• Extra bed / child policy. Age cutoffs for "no charge," and the exact extra-bed rate, not "as applicable."
• Release period / cut-off date, in number of days before arrival, not a vague "advance notice."
• Blackout dates, named explicitly by date or festival, not "subject to availability."
• Peak-season advance/deposit terms. What percentage, by when, and is it refundable if the hotel later has availability anyway.
• Rate validity window. Net rates quoted in March often don't hold through October, so get the season-end date in writing.
• Cancellation policy for confirmed (named) bookings, separate from the allotment release clause.

Careful: A quoted net rate with no validity date attached is not a real quote. It's a starting point for the hotel to walk back later. Always ask "till when does this rate hold" and get the answer in the same message as the rate.

Common questions

Is a net rate always cheaper than a commissionable rate?

Not necessarily on paper. A net rate can be higher or lower than rack-minus-commission depending on the property. What net rates reliably give you is control: you set the markup and get paid at booking, instead of waiting on a commission cycle you don't control.

Do I need a written contract for a small allotment?

At minimum, get the rate, room count, release period and blackout dates confirmed over email or WhatsApp before you promise a client anything. A signed contract, tracked in a proper DMC contracting system rather than a scattered inbox, is better once volume grows, but a clear written confirmation is the non-negotiable floor.

What if a hotel breaks the release period and sells my held rooms early?

This is where a written agreement earns its keep. Without one, you have no basis to dispute it beyond goodwill. It's also a strong signal to stop growing that allotment and shift volume to a hotel that honours terms.

The short version

• There are three hotel-buying models in India: commissionable rack rate (10-25% commission), net rate (you set the markup, paid at booking), and allotment (a held block with a release period).
• Release period is the clause that caps your unsold-inventory risk on an allotment. Negotiate it explicitly, and don't confuse it with a booking's cancellation policy.
• Get blackout dates in writing before you sign; an unwritten blackout list means the hotel can invent one whenever demand spikes.
• Lead negotiations with your actual or projected volume, not a request for a better rate. Hotels price against forecast, not hope.
• As a rule of thumb, roughly 10+ room-nights a month into one destination is the kind of pattern that gets a hotel to offer a real allotment instead of standard commission.
• Before signing anything, confirm meal plan definitions, check-in guarantee, extra-bed terms, release period, blackout dates, advance terms and rate validity, in writing.
• Rates and commission bands here are reported industry norms, not regulated figures; confirm current terms property-by-property before you contract.