What is a good overbooking strategy?

Know ahead of time what you'll offer the guest. The hotel industry standard for overbooking compensation is usually one night's stay plus transportation costs to the new property. If the guest returns to the original hotel, they're usually offered an industry rate plus any available upgrades.



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Overbooking, also known as overselling, is the practice of accepting more reservations than rooms you have available. The term can also refer to overbooked flights - we've all been offered vouchers to leave behind a confirmed reservation or airline ticket and the concept is very similar in hotels.

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Reduces your loss during last-minute cancellation The major advantage of overbooking is that it offers a backup plan for canceled reservations. This means that if someone cancels their booking at the last moment, you don't have to worry about any loss because you have another guest lined up for check-in.

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While overbooking makes sense from a business perspective, forcing paying customers off a plane to make room for their own employees – the reason for United removing passengers from this flight – seems like unethical business practices.

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When overbooking in hotels is done intentionally, the risks include: Negative customer experiences that lead to negative word of mouth. Loss of potential revenue from upsells, ancillary services, and in-room upgrades.

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Whether you're flying from New York or New Orleans, Lisbon or London, airlines continue overbooking to compensate for “no-shows” all the time. Simply put, they sell more tickets than they have available seats. And it's not an illegal practice.

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If there are not enough passengers who are willing to give up their seats voluntarily, an airline may deny you a seat on an aircraft based on criteria that it establishes, such as the passenger's check-in time, the fare paid by the passenger, or the passenger's frequent flyer status.

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The most common sources of reservation are : Travel agent, Companies/corporate houses, Airlines, Embassies/consulates, Government Office and Ministries and Personal approach.

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If your flight is overbooked and you're willing to give up your seat, experts advise negotiating with airline staff to drive up your compensation package before accepting. “Many times you can negotiate for things like a better flight, hotel vouchers, meal vouchers and lounge passes,” Keyes says.

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It is legal to overbook seats for a flight on the provision that passengers who don't get a seat due to overbooking must be compensated with an alternative flight, cash, or travel vouchers.

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Most airlines intentionally overbook flights, selling more tickets than available seats for a journey. They do this in anticipation of people no-showing on the day of the journey, and the practice is not illegal. Travel experts have warned that as many as 150 tickets are sold for every 100 seats available.

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In addition, the practice of overbooking allows airlines to keep fares low for the flying public. If airlines were no longer allowed to overbook, fares would likely rise as airlines would have to pass on the costs of more empty seats to consumers.

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Overbooking = more profit, but often = unhappy customers. Airlines use statistics to avoid overbooking, resulting in 50k people getting bumped off flights annually. Airlines use data to predict the number of passengers boarding a flight.

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Consequently, a bad overbooking strategy can cause a lot of damage and a whole lot of stress: from guests to associates. It often leads to bad online reviews, harm to your online reputation, financial loss, and “real-life” complaints. Nevertheless, a good overbooking strategy can bring many benefits.

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While it is legal for airlines to involuntarily bump passengers from an oversold flight when there are not enough volunteers, it is the airline's responsibility to determine its own fair boarding priorities.

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