Handling Hotel Overbooking – 2024 Guide for Managers & Owners

As you may know, the hotel overbooking (also known as a double booking) is a pretty common occurrence in the hospitality industry. In fact, 25% of properties listed on Booking.com get overbooked within the first year!*

Whether you’re looking to use overbookings to your advantage, or want to make sure they never happen, there are some things you need to know.

Let’s walk through exactly what an overbooking is, what causes them to happen, and how you should manage them when they do.

A hotel overbooking (aka a double booking) is when one hotel room is booked for the same date by more than one guest or group.

To put it another way, an overbooking is what happens whenever the number of hotel rooms that guests have booked exceeds the number of rooms that are actually available.

When a room that’s already taken gets booked by somebody else, it can lead to frustrated customers, damaged reputations and hefty fees.

But there are ways to manage overbookings – and prevent them in the first place – that mean less stress for you and your guests.

The main cause of overbookings is having your property listed on multiple channels at once. This includes different online travel agencies (OTAs) and metasearch engines.

For example, let’s say somebody books one of your rooms through Booking.com. That room may not automatically become unavailable on the other channels you list on. There’s a risk that someone else could book that same room before you have the chance to block it off manually.

Your first thought here might be to restrict the number of channels you list your accommodation on. Don’t! Listing on multiple channels is key to getting your property seen and driving bookings. In fact, we recently found that eviivo customers generate the highest average total revenue annually when they partner with between 3 and 4 OTAs.**

(Want to know which OTAs you should list your accommodation on? Then download our infographic.)

Another factor that explains the frequency of hotel overbookings is pure human error. This one’s especially likely if you’re managing all your channels manually. Perhaps somebody in your team didn’t input the date of a booking correctly, or they selected the wrong room. It’s hard to get it right every time, for every booking, when you have to update it all yourself as quickly as possible.

We know, we know – so far we’ve only talked about accidental overbookings. But you’re probably aware that many hotels deliberately overbook rooms as part of an overbooking strategy.

The reasons many hoteliers use overbooking strategies include those last-minute cancellations and on-the-day no shows that most of us recognize. Some hoteliers consider overbooking a way to get around these common hiccups and optimize occupancy to keep generating revenue.

However, a hotel overbooking strategy has to be planned and carried out carefully. Otherwise, the risk and impact of the poor guest experiences it can create is just too high. To plan a successful overbooking strategy — one that accurately takes account of the likely last-minute cancellations and reduces the chance a guest is left out in the cold — we recommend turning to data.

Consider a software that gathers and analyzes insights on your bookings like eviivo Performance Manager. This may help you work out whether, when, and how often to overbook.

Maybe you don’t want to develop an overbooking strategy? You’re still at risk of double bookings if you can’t update your room availability across all channels in real time. So it’s best to prepare for when it does happen.

Make sure you have a plan in place to minimize the disruption to your guests when an overbooking occurs. Here are some ways you can leap into action.

The first thing to do is find out whether you have another room of the same standard available. When you factor in your typical level of cancellations or guests who simply don’t show up on the day, you may find there’s a room free to accommodate the affected guest.

If nothing’s available, prepare to pay the fee and accept any other consequences laid out in the relevant booking channel’s cancellation policy. This is unfortunate, but there’s still action you can take to reduce the guest’s dissatisfaction (as well as the damage to your reputation!).

If there’s truly no room at the inn for the affected guest, then make sure you minimize the fallout. Have a list prepared of alternative accommodations nearby, so you can relocate your guest rather than turn them away empty-handed. Provide free transportation to this alternative – and, where possible, pay for at least their first night’s stay.

Combine this relocation with the offer of a free service, like a meal at your property or a discounted future stay. This shows the guest your care and consideration. You reduce the likelihood of negative reviews and improve the odds they’ll give you a second chance in the future.

An overbooking means you may have to make tricky decisions around who to accommodate and who to relocate. If multiple guests or groups have booked one room, who gets it first?

You may be tempted to say “he who books first, gets the room”. Instead, you should consider the lifetime value potential of each guest. It’s probably more beneficial to accommodate a loyal returning guest over somebody who’s booking with you for the first time.

Now all guests have been taken care of, it’s time to work out what caused the overbooking and/or how you didn’t spot it in advance.

Was it a matter of human error? If the answer is yes, consider whether your staff are too busy to manually update bookings on top of their other tasks. Perhaps you lack the right technology that can help you manage bookings via multiple channels.

If you want to make sure no guest ever goes unaccommodated, you must keep your room availability up to date at all times, across all channels. This is virtually impossible to achieve manually!

So, what is the perfect hotel overbooking solution?

A channel manager software is your answer. A strong booking and property management platform, like eviivo Suite, will have an integrated channel manager that connects you to all the major online travel agencies, including Booking.com, Hotels.com and Expedia. This means that any bookings made on one channel will automatically update your room inventory across all the others, too.

eviivo Channel Manager provides a 2-way integration between eviivo Suite and the online travel agencies. That means it updates any changes to your room availability or your rates across all channels in real time. These updates will show up instantly on your booking calendar in eviivo Suite.

If you’re looking to develop an overbooking strategy, Channel Manager still helps you by taking care of that crucial first step – giving you full visibility of all your bookings, across every channel. That means no nasty surprises.

Avoid hotel overbookings without the need for endless paperwork or tedious manual work. Just make sure to update the system when guests book over the phone or in person, and you’ll never have to deal with an angry, room-less guest again.

*https://partner.booking.com/en-gb/help/reservations/manage/all-you-need-know-about-double-bookings

**Data taken from survey of actively OTA-partnered eviivo customers, 2022