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Revenue Management Glossary



Attrition is a clause that is found in group booking contracts and it is designed to protect hoteliers’ against lost revenue for empty rooms reserved, but not filled, by the group. The attrition clause states that the group must fill (and pay for) a minimum number of the reserved rooms and if they don’t, they are charged a fee to compensate the property for the rooms that were not filled. Attrition can also apply to minimums in food and beverage purchases for group and event bookings, and works in the same way.

Attrition rates are a key negotiation term in many group contracts so it is important to understand how and why it should be used to protect your bottom line.

How to use it

Generally, attrition clauses are based on a percentage of the total amount reserved; for example, if a group has a contract stating that they must fill at least 80% of the rooms (the minimum attrition rate) and they only fill 70%, they may have to pay a fee equal to 10% of the total booking to compensate the hotel.



Related Terms

Group Market, Business Travellers, Tour Operators, Destination Management Companies, DMC, TMC, Travel Management Companies, Incentive companies, Charter Tours, Group - Market Segment, Group Displacement, Meetings, Conferences, Events, Weddings, Hotel Sales, Occupancy, Inventory Management
“Attrition is an important clause to include in your group contracts because it protects your property against the loss of revenue if a group’s reserved bookings doesn’t match the number of rooms that are actuall filled. The attrition clause provides protection for the hotelier’s bottom line by requiring the group to fill a minimum percentage of the rooms reserved (the minimum attrition rate); if they don’t meet the minimum, hotels are able to charge a penalty fee to balance the lost revenue on the empty rooms.”

Tim Boersma

Tim Boersma