Overbooking is essential for maximizing hotel occupancy and revenue. However, if not managed carefully, it can be costly for hotels, inconvenient for guests, and daunting for staff. 

Our latest guide breaks down the complexities of overbooking and offers actionable insights to help small, independent hotels turn overbooking into a strategic advantage. 

Here’s a snapshot of the key takeaways in the guide:

Understanding Overbooking Strategy

Overbooking is a calculated risk taken by hotels to compensate for cancellations and no-shows. By strategically overbooking beyond room capacity, hotels can help ensure maximum occupancy rates, minimizing the revenue lost due to vacant rooms. 

Assessing the Risks of Relocating

Sometimes overbookings are due to an employee error, technical glitch, or maintenance issue. Whether intentional or not, when cancellations don’t materialize as anticipated the hotel may have to relocate guests. 

Being “walked” is inconvenient for guests and may lead to a negative review or complaint on social media. It’s stressful for staff, who often bear the brunt of the guest’s frustration. And it’s costly to the hotel, which must pay for the guest’s accommodation. 

Managing Overbooking Strategies

In the guide, we share tips and strategies for maximizing occupancy while minimizing relocates, including: 

• Set overbooking limits
• Forecast demand to identify opportunities to oversell
• Centralize decision-making
• Align pricing with overbooking strategy
• Confirm reservations in advance

Deciding Who Can and Can’t Be Relocated

Certain guests should never be relocated, such as VIPs, frequent guests, top corporate accounts, and guests paying a high rate or celebrating a special occasion. 

When deciding who to relocate, some hotels prioritize guests who booked through lower-value channels like OTAs and wholesalers over those who booked directly. 

Managing Relocates Like a Pro

When relocates are inevitable, careful planning and professional communication with guests will help ensure the process goes as smoothly as possible. 

This includes preparing a checklist, providing training for staff, and making advance arrangements with a nearby, comparable property. 

Hotel Software to Help Manage Overbookings

Technology, such as a best-of-class PMS, channel manager, and automated revenue management software, plays a vital role in implementing a successful overbooking strategy. 

These tools help hotels analyze booking data, predict guest behavior, optimize overbooking levels, and ensure you’re always priced appropriately. 

Manage Overbookings with More Confidence and Better Results

Overbooking doesn’t have to be a gamble. With effective strategies and the right technology, hotels can earn more revenue while minimizing inconvenience to guests. 

To dive deeper into these strategies and more, check out our full guide today!