Overbooking management is the practice of selling more rooms than are physically available, anticipating cancellations or no-shows. Hotels use this strategy to maximise occupancy and revenue while aiming to avoid having unsold rooms.
In hotel operations, it is important to carefully control overbooking. Revenue managers use data such as historical bookings, cancellation rates, and other demand indicators to establish safe overbooking limits.
Poor overbooking management can harm a hotel’s reputation and increase customer acquisition costs.
Modern PMS and RMS systems use technology to automatically manage overbooking rules and forecasting. When used with guest communication tools like Viqal, hotels can actively manage affected guests, offer alternatives, and maintain satisfaction levels if relocation is needed.
Overbooking is a deliberate revenue optimisation strategy, not an operational error. To be successful, it requires accurate forecasting and transparent communication with guests.
• Check the room inventory in the PMS every day.
• Try to spot which arrivals might be at risk early (for example, if booked online or arriving late).
• Communicate transparently with guests and provide upgrades or added benefits as compensation.
• Work with nearby hotels to relocate guests if required.
