Definition
A theoretical forecast of total demand if your hotel had unlimited inventory and no restrictions—how many rooms you could sell if capacity weren't a factor. Understanding unconstrained demand reveals the true size of your market opportunity. When unconstrained demand significantly exceeds available rooms, it signals opportunity to increase rates; when it's below capacity, promotional strategies may be needed.
Also related to Demand Forecasting
Related Terms
Booking Pace
The speed at which reservations accumulate for a specific future date compared to the same point in time for similar historical dates. Tracking pace helps identify whether demand is building faster or slower than expected, enabling proactive rate adjustments. A date pacing ahead of last year may warrant a rate increase; pacing behind suggests promotional action.
Learn more →Booking WindowBooking Window / Lead Time
The number of days between when a reservation is made and the guest's arrival date. Understanding booking windows by segment is crucial—business travelers typically book 7-14 days out, while leisure guests may book 30-90 days ahead. This knowledge helps optimise when to release inventory and adjust pricing as the arrival date approaches.
Learn more →Constrained Demand
The actual number of rooms you can sell given real-world limitations—your physical inventory, existing bookings, and any restrictions you've applied (closed dates, minimum stays). Constrained demand represents what will actually happen, as opposed to unconstrained demand which shows total market interest. The gap between them reveals missed revenue opportunities.
Learn more →Forecast Accuracy
A measure of how closely your demand predictions match actual results, typically reported as a percentage error (e.g., an average error of 5%) or as an accuracy percentage. High forecast accuracy enables better pricing decisions, optimal staffing, and reduced operational waste. Track accuracy at multiple lead times (7, 14, 30 days out) to identify where predictions need improvement.
Learn more →Want to improve your Unconstrained Demand?
Sigma Revenue helps hotels improve their key metrics through data-driven revenue management.