Distressed inventory

Distressed inventory in the travel industry refers to travel products like hotel rooms, airline seats, or rental cars that haven’t been sold and are close to the date when they can no longer be sold. Since these services are perishable in nature and can’t be stored for later use, not selling them means losing potential revenue. At the same time, the cost of providing the service remains relatively fixed regardless of whether it’s sold or not.

To mitigate losses from distressed inventory, travel companies employ various strategies, including 

• offering last-minute discounts, 
• changing prices based on demand, 
• creating package deals or special offers for loyalty program members, and 
• using online travel agencies and other third-party resellers to distribute these unsold services. 

While these strategies help travel businesses drive sales, distressed inventory is typically sold at a lower price, so companies must find an optimal balance between revenue and occupancy to maximize profit.