Certainly during the high season and especially major events, overbooking in hotels is almost inevitable.
From the hotelier's perspective, overbooking is the means to optimizing room's revenues. It is the oldest and one of the most commonly used revenue strategies implemented in hotels' operation management to maximize revenue at a particular point in time.
Overbooking, nevertheless, if not properly managed could lead to disappointing results - Loss of revenue, customer complaints, damage of the brand and so forth.
Keeping record of no-shows and last-minute cancellations during high demand periods is vital to optimizing expected revenues. Both revenue and reservations managers, during these periods of high demand, deliberately oversell the hotel to tackle this issue and minimize lost revenue from unsold rooms.
Compiling and analyzing the no-shows and last-minute cancellations trend could tell revenue and reservations managers about how much to oversell the hotel to reach 100% occupancy during the period.
To avoid the hustle and bustle of a crowded front desk I have put together a list of four top tips for revenue and reservations managers which as well could help optimizing room's revenue during high demand periods.
1 - Raise online rates as high as possible:
Obviously, the first step in dealing with overbooking is to stop sales. Yet, because customers who book the hotel online pay much more higher prices than ordinary customers, online booking providers will not in any way accept stop sales. Thus using fence rates will restrain booking the hotel through online travel agencies as well as maximize revenue during the desired period.
2 - Raise contracted release periods
Zero release day means that customers could check-in at any desired time. Using a longer release period, for instance, 7 or 14 days could result in bookings much more in advance.
3 - Double-check reservations by arrival date:
Double-checking reservations by arrival date is a powerful method used by reservations managers to eliminate potential errors.
4 - Raise minimum stay period:
The length of the minimum stay period if set long enough, could generate better occupancy level for the period which means more revenue for the property.
During high season and major events, revenue and reservations managers have to find the right balance between offer and demand by setting the right rooms rates and applying the appropriate fences in order to maximize revenue and prevent overbooking.
About Taoufik Haraketi
Taoufik Haraketi is a room reservations manager and blogger heavily involved in Hotel rooms revenue management and hotel online marketing. He holds a BBA Hotel & International tourism management from the American University of London. He is currently employed as a reservation manager at Caribbean World Hotels and Resorts in Tunisia.