What is the Booking Limit?

The booking limit is a restriction on the maximum amount of inventory that can be sold at a certain price. Setting the booking limit is critical for maximizing revenue; setting it too low could mean that value-price customers are turned away, while setting it too high may result in full-fare customers being excluded. The booking limit can be set to automatically adjust downward when a large number of full-fare customers appear; this maximizes revenue at the cost of offering less inventory to value-price customers.

Example of a Booking Limit

Here are two examples of a booking limit:

Airline booking limit. An airline sets aside a block of 50 seats on a specific flight that it will sell for $200 each. Once all 50 seats have been booked, the booking limit has been reached for that block of seats and no further tickets will be sold at the $200 price.
Hotel booking limit. A hotel has a total of 50 deluxe rooms but sets a booking limit of 45 rooms for this category during peak season to prevent overbooking. The hotel uses this limit to ensure availability for preferred or high-paying guests, accommodate unexpected maintenance needs, and reduce the likelihood of having to move guests to other room types if demand exceeds expectations.