Constrained Vs Unconstrained Demand

Constrained demand 

For hotels, constrained demand refers to a situation where there is limited availability of hotel rooms, and the demand exceeds the supply. This can occur during peak travel seasons or major events when hotels in a particular location become fully booked. In such situations, hotels can charge higher prices since demand is high, and customers may be willing to pay more to secure a room.

Unconstrained demand

On the other hand, unconstrained demand refers to the total demand for hotel rooms in a particular location without any restrictions on the supply. In other words, it represents the maximum number of hotel rooms that customers would want to book if there were no constraints on availability or pricing. This information is important for hotel owners and operators to determine the market potential and the possible revenue that they can generate from their properties.