How Do Hotel Room Blocks Work?

A block in a hotel is a collection of rooms allotted for and paid for by a particular group of guests, company, travel agent, tour operator, or another source. So, how do hotel room blocks work? 

Room blocks are booked for certain days and can include different guest room types and banquet rooms. Individual guests sent by the booking source can check in and check out any date within the main block’s reserved period.

Meaning of Blocks in Hotels

Blocking hotel rooms, hotel room block, or allotments have the same meaning, while the term ‘block’ or ‘blocking’ closely relates to hotel property management (PMS) systems. 

Definition of a Hotel Room Block

A block is a group of rooms reserved/allotted for guests arriving from an event organizer, travel agent, or wholesaler.

• What constitutes a hotel room block? A block contains guests or attendees, rooms, food and beverage, and one or more banquet function rooms with sound and decoration-related items (if it includes an event).
• Typical size and duration of room blocks: It varies depending on the purpose of the block. Even though the words ‘block’ and ‘allotment’ are interchangeable, allotment refers to travel agent or wholesaler bookings, while block relates to events.

What is Block with Example?

Hosting an event such as wedding hotel blocks or corporate events in a different region can happen in a day. Most of the time, the guests need to arrive a day before and leave a day after the event.

• It would help if you had a few rooms, sometimes different room types, to accommodate other guest groups in wedding hotel blocks. 
• You will have one or more events with food & beverage and other event planning logistics needed to complete the event, such as sound, decoration, etc.
• Sometimes, the event might be at a different location, but you still need the room block to accommodate the guests.
• Depending on the type of event, attendees or your guests can arrive at different times or even on various dates.
• Finally, all room charges are billed to one master folio. 
• Charges for events or banquet functions are predetermined, and a deposit is paid. The bill will usually be different (another master folio for F&B for clarity purposes).
• Usually, in this type of block agreement, there is a cut-off date or release policy. Say an organizer reserves a block of 20 rooms from 16/10/2024 to 19/10/2024 and confirms on 13/10/2024 with a deposit. These 20 rooms will not be available for the hotel to sell to someone looking to book a room from 16/10/2024 to 19/10/2024. However, if the release policy says the block cut-off date is 14/10/2024, any rooms not picked up by a guest from the organizer by the 14th, the room will be released for the hotel to sell.

Tour operators, wholesalers, hotel consolidators, and travel agents also block hotel rooms in large and resell them to individual travelers and, sometimes, to smaller resellers and operators.

• These blocks usually do not include events, food, and beverages (allotments). However, breakfast is included in the room.
• Unlike the previously mentioned event group, tour operators buy allotments in large quantities from hotels with thousands of rooms. 
• Their target markets are the hotels at great attractions and pilgrimage areas. 
• They buy for extended periods and the whole season.

Importance of Booking a Block of Rooms for Events, Weddings, or Group Travel 

Finding a group of rooms at a hotel during the days you’re planning to host the event is not easy. Finding several rooms at a location close to your event venue and strategy will be even harder. 

By reserving a hotel room block, you ensure your event’s success by guaranteeing a comfortable place for your attendees to stay safely at a discounted rate without last-minute disappointments in finding them their hotel rooms.

Are Hotel Blocks Worth It? And, What are the Benefits of Block Booking?

Blocking involves the guests, the organizer (or the tour operator), and the hotel. There are benefits as well as drawbacks for each party. Let’s see the benefits:

Understanding Hotel Room Blocks with Example

The image depicts a block, and bulleted points assist further clarification of any doubts that may arise:

• Our sample hotel has five floors and twenty rooms of four room types. Though it is not a good hotel for blocks, it is to keep things more straightforward.
• Orange and red rooms are in the same block. In this example, red means that those rooms have confirmed bookings from the block organizers—called “Pickup” rooms. Orange rooms are blocked, but no confirmed reservations have been made. 
• In the above sample, any room that is not red or orange belongs to “House Availability” or “House Inventory.” This means the hotel staff can sell those rooms to another potential guest without bothering the room block.
• Every block has a “cutoff” date (rarely not). This date tells the hotel that it will take back the availability of the blocked rooms if a room is not picked up by this date.
• “Potential room revenue of this block is $2060, which is to say that if all rooms are made up (That includes both red and orange rooms)
• “Actual room revenue” is $920, totaling all picked-up rooms.
• Also, notice that individual rooms can be of any type.
• Individual rooms don’t need to be next to each other.
• A room block can be room only, catering only, or even room and catering. Suppose a wedding or event block includes rooms and banquet function rooms. Similarly, people can block banquet function rooms only (without guest rooms), so it becomes a catering block.

Benefits of Booking a Room Block

• Guaranteed booking for guests.
• Cost savings through discounted rates.
• Winning a complimentary room through negotiation – negotiate hotel room blocks.
• Convenience for guests and event organizers.
• Overall, interaction, transportation, and coordination between the event organizer and the group guests were simplified.
• Easier and more organized handling of group guest bills.
• Centrally control in-room systems for the group guests, for example, to display event-related information on the in-room TV screens, display/hide charges, control music, etc.
• If your block includes events, depending on the hotel you book with, you have a variety of F&B options.

How Much Does It Cost to Reserve A Block of Hotel Rooms?

Initially, when you block a room, it doesn’t cost you anything as the hotels block future blocks as inquiry status, which tells that the block is still in the negotiation stage. Once you complete the negotiations and confirm that you agree with the terms, it becomes a ‘tentative’ group booking until you pay a deposit to turn this block booking into a definitive or confirmed one. 

The deposit amount varies from hotel to hotel, but it is usually between 10% and 50% of the total cost of the room nights.

How to Reserve a Block of Hotel Rooms? Steps to Book a Block of Hotel Rooms

How Do Hotel Room Blocks Work for Wedding?

The below sections discuss the details that can be applied to any hotel room block, including weddings.

Plan Your Dates and the Needs

• Budget: Define your budget and detail the expenses within it. Knowing how much you’ll spend on a particular item upfront will help narrow your options and streamline your searches.
• Dates: For certain events, you cannot have options for dates, but for others, you can still have options with dates. For instance, you can still be flexible with dates at a wedding or similar occasions. When possible, select dates that are likely not busy in the location where you are planning to book your rooms and function spaces. Also, check the attendees’ convenience. Once you balance these two factors, you can confirm the dates. 
• Function/event/convention center: First, plan the event location or function room. It is advisable to decide on the function room before the event accommodation because your event has to be hosted in one particular place, while the guest rooms can be in different locations, and the guests can travel to attend the event.
• Other requirements: Then, assess your event and group’s requirements, including the number of rooms and room types into which you will have to accommodate different guests. Also, list your event needs, such as decorations, setups, sounds, IT, and anything else necessary. Most of the time, even the manager will help with it, but you have an idea of the financials you’re willing to spend, which will help during the negotiations with the event manager.
• Keep notes of points where you need to negotiate with the potential hotel.

Research Potential Hotels

• Location, amenities, and pricing are factors to consider. You can look for hotels using online booking platforms to prepare your initial list in a specific region and understand the overall quality of the place. Remember, the Internet and phone calls are not the best options when negotiating with the hotel, so keep them for initial research.
• How can you effectively compare different hotel options? Once you have compared the hotel location, room, and function space quality through internet searches, it is time to call the shortlisted hotels’ sales or banquet teams to discuss your needs and get a quote or proforma folio with the details. You can compare the financials, amenities, and block policies among the shortlisted.
• Bring down your shortlist to two hotels and pick the best.

Contact Hotels to Request Room Blocks

• Tips for reaching out to hotels: Once you call the main line, inform them to forward you to the banquet coordinator, who will listen to your needs, advise where necessary, and finally recommend what is best and most cost-effective for your event. While banquet coordinators or managers are experts at event organizing, they can still check for room block side and availability with the hotel reservation management team. 
• Importance of mentioning special requirements or discounts: It is best to discuss and point out all your needs and ask for complimentary items and services here. Sometimes, it is better to flex specific policies. For example, a flexible early check-in and a late checkout may help your event attendees with varying personal or corporate travel arrangements. Please request to send an initial contract, BEO (Banquet Event Order), and a pro-format invoice.
• Once you have them from at least two hotels, you’ll be better positioned to pursue further negotiations and finalize the contract.

Key Hotel Contract Terms to Understand When Negotiating Room Block Contracts

• Minimal / Maximum Guest Rooms in Their Block Policy: Some hotels have a policy linked to this requirement to qualify for blocking the rooms or even if they accept your group discount on room charges.
• Attrition Policy: In hospitality industry practices, attrition clauses tell you how the hotel will penalize you for blocked but unoccupied rooms in your block. If you block 100 rooms for three days during your event in 6 months, the hotel will not sell those rooms to another during your reserved period. The hotel expects 100 X 3 nights’ revenue on those dates. So, hotels have a policy to penalize/charge you if you do not meet those nights. Hotels can set a limit in one of two ways: minimum room occupancy per day or minimum nights throughout the block dates. You need to check this with the hotel.
• Cut-off Dates in Bookings: This is the date when the hotel can use the blocked rooms that are not yet booked and sell them to another customer. Check with the hotel how many days before the event unreserved (non-pickup) rooms will be released. To guarantee their rooms, communicate with your attendees and guests to confirm they all make their bookings with the block’s code before this date.
• Elasticity of Block Rooms: What if you need to increase the number of rooms after confirming or during the checked-in status?
• Deposit/Cancellation Policy: Discuss the deposit/cancellation policies, the amount payable, and cancellation penalties.

Hotel Negotiation Strategies

• Book as early as months, if not a year in advance, is best. When you have enough time, you have more options, and hotels know it. So the possibility of getting better discounts and amenities is very likely.
• Be prepared and organized with the data that you collected during your initial calls with other competitors.
• Have a brief understanding of hotel terms and jargon related to blocks. When the hotel staff knows you know what you’re talking about, it gives you an advantage in negotiations.
• How to leverage competing offers to negotiate better rates. Hotels don’t want companies to slip into competitors like in any business.
• Do visit the hotel and request a site inspection. It also helps to build relationships with hotel staff. Notably, there are things you have to see to confirm, not just online. For example, neighborhood, travel time to the hotel due to busy roads, function spaces and their quality, overall staff friendliness, hotel’s preparedness to handle your event, etc. Sometimes, it can highlight specific points that will help increase your bargaining power with the initial contract.
• Please do not sign the contract, revise it, or check for the above terms to your benefit. If you have a hotelier friend, get advice. Take your time with the contract and revise it a few times.
• Negotiate highly on room discounts, food and beverage discounts, amenities, free transportation, complimentary rooms, welcome bag distribution, and anything else to reduce costs.

Monitoring Bookings and Adjustments

More pickups from a blocked room indicate a successful event or group. It is also a win-win situation for both the hotel and the group organizer as it reduces the chances of penalties on the booker while increasing the hotel’s revenue potential. 

For large blocks, tracking how many rooms are being picked up and releasing rooms back to the hotel daily is a good strategy. Setting a cutoff date would work for short and small blocks.

Either way, contact the attendees to check whether they can pick up the rooms and help guess your pickup rate is better.

Work with the hotel and get block activity reports on the system daily.

Communicating with Guests

How to inform guests about booking links and deadlines.

FAQ (Frequently Asked Questions on Hotel Blocks)

1. What is a hotel room block? A block of rooms is reserved for a particular event or group during a predetermined period. It can include rooms, function spaces, food and beverage, and any other miscellaneous arrangements.
2. How many rooms do I need to book a block? Usually, 10+, but different hotels have different standards.
3. What if my guests don’t book their rooms? If your guests don’t pick up their rooms, the reserved rooms in the block will sleep. Your hotel’s contract tells you how many rooms can go unutilized without penalties. Check the Attrition policy discussed above.
4. Can I change my room block after booking? Yes.
5. How do hotel blocks work for weddings? It is the same as any other booking, though special requirements may differ. 
6. Do you have to reserve a hotel block for a wedding? Not necessarily. However, hotel blocks benefit you if you’re hosting your wedding event only (catering only) or need event catering and hotel rooms for the guests attending the event. You’re guaranteed the availability of guest rooms and function spaces and with good discounts. You get to work with experts who can assist you in detail. You can also work within the budgetary framework and adjust the needs to benefit your costs.