Hotel Trends
Published
5/26/2022

Everything You Need To Know About Overbooking

3 Minutes

Ciboni Vaz
Published
5/26/2022
Hotel Trends

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First of all, what is overbooking?

Overbooking occurs when more rooms are booked than are available at the property on a given night. Overselling can happen in the hospitality industry for many different reasons.

However, sometimes concurrent bookings occur when two guests book the same room at the same time through different channels. How could this happen? A good channel manager updates about every minute and inevitably leaves a small window where multiple guests can book the same room.

System configuration errors are also common. All channel managers and individual channels require careful setup. Errors can occur if you skip a step or don’t include all of your rooms. For this reason, you should always try to follow the setup guides provided by your property management system (PMS) channel manager and room reservation channel.

Each channel must be correctly mapped to coordinate the number of rooms and room types in your software with other channels. Let’s further talk about the overbooking strategy.

Overbooking can be a profitable strategy when done right. It helps hotels mitigate losses by ensuring your hotel is fully booked even with last-minute cancellations. If you find yourself in a situation where there are no more rooms available on the day of check-in, this is often more cost-effective. finding alternative means of transport and accommodation for the displaced guest than having empty rooms.

On the other hand, overbooking can have negative consequences, especially the impact on customer satisfaction. Overbooking can be a stressful situation for the receptionist and guests. A plan that effectively accompanies the guests is crucial. Accompanying guests means arranging accommodation for them elsewhere if your property is overbooked. If an incident occurs, handle it with the utmost care to avoid possible negative comments or reviews.

How to avoid hotel overbookings?

1. Keep tabs on your bookings -

During your daily report analysis, you should monitor already confirmed reservations, canceled reservations and the current availability. If you don’t do this, you should run nightly checkout reports, arrival reports and internal reports to get a clear picture of your property’s occupancy status. Then look at the day’s incoming bookings and see if you can anticipate overbooking issues.

2. Check where the overbookings flood in from. -

Important step right here! Once you find the source, make sure the channel is no longer open and prone to overselling. After determining that you are oversold, review historical data on how many cancellations you typically have for that period. Sometimes an overbooking or two puts future cancellations at risk.

3. PMS Systems -

You can reduce errors and save time by automatically updating your room inventory across all sales channels from your PMS system. The PMS gives you an overview of your business. You can maximize utilization and revenue with real-time data displayed on the PMS dashboard and calendar. The integrated cloud-based PMS allows you to manage your inventory, update your prices and availability across all sales channels and your booking engine, and keep all reservations (including walk-in customers in sync in real-time.

4. Handling an overbooking.

It is extremely important to handle overbookings tactically. Keep monitoring the situation at all times. Mostly, it will be difficult to decide the best course of action too far in advance. If you don’t know if a guest needs to be moved due to overbooking, continue to monitor the situation.

Ideally, you should contact the guest prior to their arrival, but in some cases this may not be possible. If you need to rebook a guest at the last minute or at check-in, please remember to show genuine care and empathy

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