What is overbooking and how does it affect customers?

Intentionally overbooking means your hotel will have more reservations than available rooms on a given day, but based on historical data or booking trends, the expectation is that some guests will cancel or not show up, opening up rooms for the overbooked guests.



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Loss of customer loyalty. Risk of denied services from OTAs and channels if overbooking occurs too often. Impact of costs of compensation and refunding.

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Advantages of overbooking in hotels
  • Mitigating losses.
  • Achieving full occupancy.
  • Compensation is cheaper than having empty rooms.
  • Availability of prediction methods.
  • Negative guest experience.
  • Potential poor publicity.
  • Take advantage of big data to make informed predictions.


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As a result, airlines can, with a degree of certainty, overbook a flight considering the number of no-shows expected, thereby maximizing the capacity available to customers. For consumers, this practice is beneficial because it allows more consumers to fly at the time, date and fare of their choosing.

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Overbooking is when your total room available reserve is less than the number of rooms that had been booked for sales in the same period. Overbooking is a common problem that happens in hotels if they are doing the daily operation task manually. It can maximize your profits and also cause you damage.

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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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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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Try to inform the guest about the overbooking before arrival, to prevent disappointments when they arrive. If you can tell them beforehand, the frustration is likely to be less. You can also try to encourage the guests to look for another place to stay themselves, of course, with your assistance when needed.

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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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Sometimes, when an airline asks for volunteers to give up their seats and fly on a different flight, there are not enough volunteers. When this occurs, the airline will select passengers to give up their seats. This is called “involuntary denied boarding” or “bumping.”

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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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Because overbooking involves the intentional and deliberate act of promising more rooms than are actually available, the practice must therefore be associated with a number of ethical and moral dilemmas.

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Carriers have been overbooking their flights for decades as a way to maximize income. According to Tech Crunch, on average, 5% of travelers miss their flight, and there are some situations where up to 15% of passengers do not show up.

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This is defined by p * x=Total Seats Available. If the probability is equal to 1 then all seats will be taken. By solving x, then x=Total Seats Available/p will give the maximum seats available for that probability p. A good explanation of the calculation of the probability of overbooking can also be found here.

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