notitur.com August 24, 2026

Revenue

Displacement

Displacement analysis looks at how much higher priced business you turn away by accepting a group or a low rate contract. A big group can look attractive until you see it blocks nights you would have sold dearer as individuals. It is the calculation that stops you saying yes to volume that actually subtracts.

Example A 40 room group at 90 euros displaces individual bookings that would have paid 130.

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FAQ

What is displacement in hospitality?
Displacement measures the revenue you lose by accepting a low-rate group or contract instead of selling those rooms to higher-paying individual guests. For example, if a group pays $100 per night but blocks 10 rooms you could have sold for $200 each, you have displaced $1000 in potential revenue.
How is displacement calculated?
It is calculated by subtracting the net revenue of the group or contract from the revenue you would have earned in the best individual sales scenario for the same nights. If a group books 20 rooms for 3 nights at $80 and the rooms would sell individually at $150, the displacement is (20 x 3 x 150) - (20 x 3 x 80) = $4200 in lost income.
How does displacement differ from cannibalization?
Displacement focuses on revenue lost by using capacity that could sell at a higher price, while cannibalization happens when a new product or channel reduces sales from an existing one within the same hotel. For instance, displacement checks if a cheap group blocks expensive individual bookings, whereas cannibalization evaluates if a promotional rate steals customers from the standard rate.

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