Displacement

Definition

The revenue you give up on other (usually transient) business when you accept a lower-rated booking — most often a group — that occupies rooms you could have sold to higher-paying guests on the same dates.

What it tells you

Whether a group or contract piece of business is actually worth taking. A 40-room group at €60 looks like income, but if those nights would have sold transient at €110, the displaced revenue can exceed the group’s value.

How to track it

Estimate the demand you’d otherwise capture on the requested dates (the unconstrained transient forecast), value it at the expected transient ADR, and compare against the group’s total value (rooms + ancillary). The gap is the displacement cost.

Where it fits

Displacement analysis is the core of group-acceptance decisions and of the “occupancy vs. ADR” trade-off — the heart of yield thinking.