What is Contract leakage?

Contract leakage is the money a hotel loses when invoices drift away from what its supplier contracts say: a rate billed above the agreed unit price, a term applied outside its effective dates, or an increase that exceeds the negotiated cap.

It happens because contracts are checked at signing and invoices at month-end totals — the line-level comparison in between rarely happens by hand. A few dollars per case, repeated across a year of deliveries, is spend leakage that never trips an alarm on its own.

Catching it means checking each covered invoice line against the confirmed agreement term and surfacing the variance before payment — which is exactly what hotel contract compliance software does.