If your hotel is in an area that has a distinct peak season, you are well aware of what it means to deal with the chaos of bookings around that time. Hotels usually overbook rooms, expecting some cancellations. But, even if you are bound to have a cancelation or two between now and any major event, you shouldn’t carelessly overbook.
Drawbacks of Overbooking:
There are many drawbacks to overbooking and it is a fine line to walk. Whether the tourist draw is a large cultural event, music festival or simply high season for visitors, the number of cancelations is not guaranteed, and overbooking your hotel can look bad for business and customer experience.
While overbooked airlines usually compensate guests with cash or a flight upgrade, there is little that can be done to pacify an irate guest waiting at the front desk apart from driving them to your competitor’s lodging, which could spell bad news for business. There is also the fear of negative guest reviews on OTAs that could ruin the hotel’s reputation.
The Art of Overbooking:
But, if you have to follow the overbooking strategy, do it cautiously. Airlines have made a lot of extra cash by honing the art of overbooking, and if done right, so can your hotel. While there are many reasons to avoid overbooking, the practice also has a few benefits. Overbooking may actually help your hotel in a few ways to pool in more revenues. It is a call to be taken after careful analysis.
Some Tips for Better Management:
– Ignore last year’s performance. While statistics are a great way to estimate, they are not reliable and the hospitality industry fluctuates on a daily basis.
– Understand your property inside out. Know what promotional rates to run, about flexible rate bookings and who your guests are.
– Follow up on non-arrivals. You will be able to gauge why some of your guests do not show up.
– Keep an open dialogue throughout the property. Be sure that sales and operations are clearly communicating with each other.
If you can gauge a little beforehand, do not hesitate to call your guests and inform them that their room is cancelled. Offer complimentary stay during off-season or a few loyalty points.
– Always have a backup plan. If all your guests arrive and you simply have no room at all, you must be able to find them an alternate property where they can stay comfortably.
Do it the Smart Way:
It is important to understand your market and your customers before attempting to overbook your property. Remember that 90 percent of the time that you overbook, you will not end up full enough for the overbooking to have paid off. If you are going to attempt this balancing act, do your research first and be sure you have all the right tech tools to make it as easy and efficient as possible. And do not forget, the customer is king and will have the last word, especially in the case of overbooking.