For ages, hotels have been recognised for their hospitality, providing a warm and welcoming culture. However, some hoteliers use hotel overbooking strategy to boost revenue, which can be alienating for guests. While other hotels can find it a nightmare to deal with the repercussions of displeased guests. 

In this blog, we will dive deeper into the basics of hotel overbooking and how hotels can implement a strategy to mitigate risks, using tech-based solutions. 

Understanding hotel overbooking

Overooking is simply the result of hotels selling rooms more than the availability for the given night. It is a common practice in the hotel industry that works as a revenue maximization strategy but has its own negative consequences. 

The concept of hotel overbooking is primarily based on assumptions that a certain number or percentage of guests will end up cancelling their reservations.

This helps hotels increase their occupancy rate, but when more than expected guests arrive, it becomes problematic to manage the room availability.

This might affect guest reviews, and ratings in an industry where guest experiences are considered paramount for the hotel’s success. 

Overbooking can prove to be beneficial for hoteliers in minimizing losses. However, it leaves a significant impact on the hotel’s reputation. 

Impact of Overbookings on your hotel business

Every questionable strategy has its drawbacks. Similarly, hotel overbooking also has its dark side that can hamper the business, reputation and sustainability.

Hotel business is driven by guest experiences. If your guests are not happy, they won’t return to your hotel. It’s extremely important that they are valued to turn them into loyal brand advocates. 

Apart from this, guests often leverage social media to express their views and experiences about a property. If any guest is unsatisfied, they can leave a negative review that can eventually affect your hotel’s image on social media.

This further hampers bookings from potential guests. 

Because of the perception that hotel overbooking can save hoteliers from potentially anticipated losses, it can create more complexities in managing room inventories, incurring charges in relocation, coordination with other guests, etc.

This not only poses operational challenges but also proves to be an expensive affair in accomodating guests requests fairly.  

Tech practices to avoid overbookings

There are several practices that hoteliers can adopt to avoid overbookings. In this scenario, technology can play an instrumental role and help hotels manage their bookings seamlessly. 

Keeping a track on bookings

As the world of hotel business is becoming more digitized, it is significant to be handy with data. If you receive a new reservation request today or any of your guest cancels the booking on the day of arrival, you should have clear metrics to take next step.

You can use an advanced booking manager to track the guests’ booking patterns, behaviour of cancellations, etc. This will help you focus on maximizing bookings without losing any opportunity. 

Leveraging PMS

In order to gain a competitive edge in the industry, invest in a good Property Management Software. Do not fall prey for expensive PMS, instead find a professional and reliable yet affordable one to automate your bookings, inventory allocation and pricing strategy. 

Channel manager

Updating inventory across all OTA channels manually can be a time-consuming and cumbersome process. It is usually prone to human errors and hoteliers must refrain from manually updating their channels.

To avoid overbooking issues, invest in a good channel manager and see how things work in the favor of your hotel’s growth. 

Dynamic pricing strategy 

To prevent hotel overbookings, hoteliers can use a next-gen hospitality management software. This can be extremely useful in optimising occupancy levels, preventing hotels from overbooking and underselling. 

An AI integrated PMS with dynamic pricing feature like Hotel-X can help hotels automate room rates based on multiple factors like occupancy and market demand, ensuring maximum bookings at the highest possible rates. 

Staff training and skill development 

The concerns related to overbooking are very common in the hotel industry. The best practice to manage this for hotels is to train their staff to handle such situations like a pro.

They should have a clear communication with their guests and quickly arrange an alternative accommodation to bring their frustration level down.

A polite and courteous staff can help you get several positive reviews and turn your guests into loyal customer base. 

Ultimately, every hotel wants to generate more revenue. No hotel business in the world would want to lose any opportunity or booking.

Having said that, if a divisive strategy like overbooking can create more complexities for a hotel, it rather better to switch to SaaS based hotel management software that can rescue hotels from such situations. 

FAQs

1.How to deal with overbooking problems?

Overbooking can be a human error, but it can be dealt effectively by integrating tech solutions that can automate workflows and also ensure guest satisfaction.

2.What are the procedures of handling overbooking?

The first practice is to prioritize clear communication with guests, offer alternative accommodation options and making the use of technology to avoid such situations.

3.What causes hotel overbooking?

When a hotel specifically focuses on traditional strategies to maximize revenue, it oversells rooms than the actual number of available rooms. 

4.What are the types of overbooking in hotels?

The major types of overbooking can be deliberate, human-error i.e. unintentional and group overbooking. 

5.What is overbooking control?

Overbooking control is a preventive measure to avoid getting into situations where hotels have to relocate the guests or accepting more bookings than the availability.