Since hotels have a fixed capacity, whenever they sell a room, they are taking a chance that they might be taking rooms out of inventory that could be requested later at a higher rate. One purpose of Revenue Management is to keep this from happening. With groups, it is usually worthwhile to do a displacement analysis, where we look at history to determine how many rooms from higher rated segments (usually Transient Rack) are usually sold on these days of the week during this season. Then, after the group business is added determine if there is any demand that cannot be accommodated. In other words, is the hotel going to be full and so some of the last people to book will be turned away. Multiply the number of guest rooms that will be denied times the average rate for that segment of business. If that is higher than the group revenue, then the group should be turned away. Obviously, if the profit from the ancillary in-house revenue from the group is higher than the profit from the ancillary revenue of the transient guests, then that has to also be factored into the decision.