Constrained Demand

What is the definition of Constrained demand in the hotel industry?

The term constrained demand refers to demand being strictly restricted in action. It is used in the hospitality industry – in income management – when referring to demand predict.

To comprehend constrained demand you must first understand unconstrained demand. Unconstrained demand is your hotel’s total demand for a exacting date irrespective of your capability. Hotels should recognize when unconstrained demand is above the capability of the hotel. This is an imperative part of your hotel revenue management plan.

Constrained demand, is the demand you get when settle in factors such as cost. By raise in price, you are varying the demand, in a way constraining it, thereby permitting less consumers to book your hotel.

The notion of “Unconstrained Demand” is at times applied when a limit of a reserve (hotel size) reduces the possible revenue from e.g. making potential of the hotel restaurant.