In the hospitality industry, overbooking refers to a practice where hotels accept more reservations than they have available rooms, anticipating that some guests may cancel or fail to show up. This strategy aims to maximise occupancy and revenue, but it also carries the risk of having more guests than available accommodations, leading to potential disruptions and dissatisfaction. Overbooking is managed through careful forecasting, monitoring cancellations, and offering alternative accommodations or compensation to affected guests if necessary.
What is overbooking in hotels?
Overbooking in hotels is when the hotel accepts more reservations than it has available rooms, anticipating cancellations or no-shows, to protect occupancy and RevPAR.
How do hotels handle overbooking?
Hotels handle overbooking by carefully monitoring reservations, offering alternative accommodations or compensation to affected guests, and ensuring minimal disruption to guests' travel plans.
