We hate to state the obvious but that’s what intros are all about right? So, managing your property’s bookings effectively is key to improving your efficiency and revenue performance.
Double bookings and overbooking can be a nightmare at your property and has the potential to impact your business negatively long-term (taking into account some operators use it as a tactic).
Let’s use this blog to deep dive and discover all the reasons unwanted double bookings might be happening, how to prevent them, and how to manage overbooking at your property.
Double booking and overbooking summary
Whether you label them double bookings or overbooking, you’re probably clear on the definitions by now but if you’re a new hotelier we’ll cover them here.
Double booking is the unfortunate occurrence of accidentally booking one room at your property for two different customers on or overlapping the same dates. Usually this is inadvertent and can cause a lot of stress for all parties involved.
Essentially the same as double booking, overbooking occurs when the total number of bookings for a time period is greater than the number of rooms available. This means, if all guests follow through with their reservation, some rooms will be double booked.
Naturally, if guests are turning up to find there is no room available to them they won’t be too quick to sing your praises.
Disadvantages of double bookings and overbooking include:
- Bad customer experiences that lead to negative word of mouth
- Negative reviews on influential sites such as TripAdvisor or Facebook
- Lost revenue, not just from the booking but from any potential extra expenditure
- Likelihood that you lose the customer forever
- Loss of guest loyalty if a repeat guest gets double booked
- Consumption of time and resources spent compensating the guest and resolving the situation
- Risk of failed partnerships with online travel agents or booking sites if problems occur regularly
There can be quite the domino effect if a double booked guest becomes disgruntled. What if they make a scene at your front desk? What if they leave negative reviews? What if they tell their friends and family about their poor experience? Word can spread quickly that you aren’t taking care of your reservations – which is the last thing you want!
Reasons for overbooking and double bookings
There are a few reasons why you might be experiencing overbooking scenarios, and not all of them are your fault as we’re sure you’re aware.
- If your property is fully booked and a problem occurs where repairs are required or you need to close a room suddenly, this will leave some guests disadvantaged.
- It can also occur when you are forced to update and manage your inventory manually. If you’re advertising your rooms on multiple sites at the same time, you may be too slow to update one site when a booking is made on another. Someone else books the same room in the meantime. You can avoid this by splitting your inventory of course, but then you risk not achieving the occupancy rate you need.
- Another possible cause of a double booking is not updating your availability correctly on your booking sites such as Booking.com. For example, if you indicate that you have two rooms available when you just have one available – and then both rooms are booked.
Lastly, some accommodation providers will deliberately overbook their hotel, for strategic reasons. While it’s not necessarily recommended for small properties we have more on that in the next section.
Overbooking strategy: Why do hotels overbook their rooms?
Hotels will sometimes overbook their property either because they can’t process credit cards at the time of booking or for other revenue management purposes. There will always be guests who don’t show up or simply cancel and this means a loss of revenue. Overbooking allows for some drop-offs and you can still have a fully booked property each night.
This is almost like gambling, in that the hotel is betting against some of their confirmed reservations actually arriving. You will make your own decisions on whether this is viable or not, but usually you’ll want some accurate forecasting and historical data to be safe in your assumptions. To get it right, you probably need to use a software solution like a revenue management system, which could be an unwanted expense at your property.
The hotel may not mind needing to find excess guests alternative accommodation at their own expense since the existing fully booked rooms will make up for it. Many properties will even pre-arrange agreements with each other to prepare for such outcomes.
However it may impact the ability to attract new customers in the long run and hotels should take into account what type of guest they are relocating. Were they a potential long-term customer, a high spender, or simply a one-time overnight stay?
How to avoid overbooking and prevent double bookings
It’s a much safer policy to try to avoid the hassle of double bookings – and you can still achieve great occupancy rates!
Using quality software to help run your property will ensure you can control your bookings and minimise the risk of double bookings.
For example, some solutions could be:
- A channel manager will allow you to advertise all your rooms on all your booking channels at the same time. When a booking is made on one channel, the channel manager will communicate with your hotel front desk system (property management system) and additional channels to ensure inventory is updated automatically in real-time. This means the availability your guests see will always be accurate and up-to-date.
- A hotel booking system such as an online booking engine will allow you to process credit card payments securely at the time of booking. Not only do you get paid directly to your bank account at the time of booking, but having these details on hand will allow you to charge your cancellation and amendment fees if your guest changes their booking or backs out. A booking engine also lets you capture direct bookings on your website or Facebook page, taking charge of the guest relationship and reducing your commission fees.
These two systems provide a comfortable safety net, so you will never have to deliberately overbook your rooms.
BUT you don’t get away with doing nothing! You’ll still have to remember to update your systems when you receive walk-in bookings or bookings via phone – if you allow them at your property.
Hotel overbooking policies and compensation
Alright, so in most cases hotels are free to set their own policies regarding reservations and cancellations etc. You should make sure you have clearly defined policies at your property and on your website. This way, you’ll always be protected if a guest makes an unfair dispute or complaint.
In the case of double bookings you have an obligation to resolve the situation for your guest, even if there may be no law dictating it. It’s fair to say if you turn guests away with a no care attitude, your business won’t last long.
When a guest is double booked, consider this question.
Do you have other rooms of the same or a better standard available?
To make sure your guest still has a great experience at your property, it’s best to accommodate the guest in one of these rooms with no extra cost to them.
It’s your responsibility to find them accommodation of the same or a better standard and cover the costs. You should also organise transportation to the new property. In this situation, the guest should absolutely not be out of pocket because they were double booked at no fault of their own.
If you ‘walk’ a guest without proper compensation, you may expose yourself to a lawsuit. No one wants to go through that. If a guest simply wants a full refund, you should absolutely consider complying with that too – even if it means you miss out on a commission from another property.
To ensure the experience with the double booked guest is as positive as possible, make sure you offer an apology, treat them with empathy and understanding, and perhaps offer them a discounted stay next time they’re in town. You don’t have to lose them forever!
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