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8 Smart Ways to Manage Overbookings in Hotels Without Losing Guests

By: Steve Behrisch , President & CEO

In hospitality, double or overbookings can be a significant challenge, potentially affecting a hotel’s reputation and guest satisfaction. 

While overbookings in hotels are sometimes used strategically to maximize occupancy, they can lead to guest frustration and operational challenges if not managed properly. 

This blog explores effective strategies for managing double or overbookings to ensure a smooth experience for both guests and hotel staff.

Understanding Double or Overbookings in Hotels

Double or overbookings occur when more rooms are booked than are available at the hotel. 

This can happen due to synchronization delays between different booking channels, human errors, or strategic overbooking by hotels to compensate for no-shows.

Research indicates that on average, hotels experience a 5-15% no-show rate, prompting some to overbook by 10-15% to optimize occupancy and revenue.

The Impact of Overbookings in Hotels

While overbookings in hotels can optimize revenue and occupancy, the risks include:

  • Guest Dissatisfaction: Guests arriving at a hotel only to find no rooms available are likely to be upset, which can lead to negative reviews and a tarnished brand reputation.
  • Operational Stress: Handling overbookings can put a strain on staff, leading to rushed decisions and potential errors in guest management.
  • Financial Losses: Offering compensation to bumped guests, such as covering the cost of alternative accommodations, can lead to direct financial losses.

How to Handle Double or Overbookings in Hotels?

I am sharing some expert tips and strategies hoteliers can use to manage their double / overbookings. 

1. Implement Advanced Booking Systems

Invest in reliable, real-time booking systems that synchronize availability across all channels, including direct bookings, OTAs (Online Travel Agencies), and GDS (Global Distribution Systems).

This reduces the risk of overbookings by ensuring all channels reflect the current booking status.

For example, using a centralized property management system (PMS) can decrease overbookings by up to 30%.

#OnResTip: OnRes provides a real-time booking engine that is integrated with a channel manager and a GDS system to avoid overbookings. 

2. Develop a Comprehensive Overbooking Strategy

Create a data-driven overbooking strategy based on historical no-show and cancellation rates. Adjust these rates based on seasonality, special events, and other market dynamics.

This allows hotels to maximize occupancy without significantly risking guest dissatisfaction.

For example, a hotel near an airport might increase its overbooking rate slightly, knowing that it has a higher no-show rate due to flight cancellations and delays.

3. Transparent Communication with Guests

Inform guests about overbooking policies at the time of booking and upon arrival. Transparency builds trust and prepares guests for any potential inconvenience.

Guests appreciate honesty, which can mitigate negative feelings if they need to be re-accommodated.

Like, consider sending an email explaining overbooking possibilities and the hotel’s policies that can improve guest perception and readiness.

4. Prepare an Alternative Accommodation Plan

Establish partnerships with nearby hotels of similar or better quality to accommodate guests in case of overbookings.

This ensures that guests are provided with quality accommodations, maintaining satisfaction and loyalty.

For example, a city center hotel might have agreements with three nearby hotels to send guests if overbookings occur, often at a negotiated rate.

5. Train Staff on Customer Service Excellence

Train front desk and customer service staff to handle overbooking situations gracefully, including 

offering apologies, explaining the situation clearly, and providing immediate solutions.

Well-trained staff can turn potentially negative situations into positive experiences, enhancing the hotel’s reputation.

Role-playing sessions that simulate overbooking scenarios can prepare staff to handle these 

situations professionally.

#OnResTip: Here are some tried and tested ways to manage angry hotel guests

6. Offer Compensation and Incentives

Provide bumped guests with compensation that may include free transportation, complimentary future stays, or immediate refunds. Include small gestures like free meals or spa services.

Compensation helps soothe dissatisfaction and can turn a negative experience into a more positive one.

Consider offering a complimentary future two-night stay can encourage guests to return, turning them into repeat customers.

7. Monitor and Analyze Overbooking Trends

Regularly review overbooking incidents to identify patterns or triggers. Use this data to adjust your overbooking strategy.

Continuous improvement based on analytics reduces overbookings and enhances operational efficiency.

For example, analyzing data from a cloud-based PMS can show peak times for no-shows, helping adjust overbooking rates seasonally.

8. Leverage Loyalty Programs to Manage Overbookings

Use your hotel’s loyalty program to offer bumped guests additional points or special privileges as part of the compensation package.

This reinforces the value of staying loyal to the hotel brand, even when inconveniences happen.

Doubling loyalty points for guests who were relocated can improve their perception of the brand.

Conclusion

Effectively managing double or overbookings in hotels is crucial for maintaining high levels of guest satisfaction and operational harmony. 

By implementing strategic planning, clear communication, and excellent customer service, hotels can turn the challenge of overbookings into an opportunity to demonstrate their commitment to guest experience. 

Remember, the goal is not just to manage overbookings but to use them as a strategic tool to enhance your hotel’s reputation and guest loyalty.

Steve Behrisch, President & CEO

Steve joined the OnRes Team as an account rep in 2008 and was promoted to VP of Operations a short time later. In 2011, Steve agreed to purchase OnRes and became President and CEO, and has been steering the ship since; achieving significant milestones such as rebuilding the reservation software from the bottom up, forging new partnerships, doubling the revenue, and much more…
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