What is Overbooking?
Overbooking is the practice of accepting more reservations than available rooms to compensate for expected cancellations and no-shows.
Overbooking is a calculated revenue management strategy used by most hotels. By analyzing historical no-show and cancellation data, hotels accept a small percentage of extra bookings to maximize occupancy. The risk is that if fewer guests cancel than expected, the hotel must "walk" a guest to another property.
Why Overbooking matters
Done well, overbooking maximizes revenue by filling rooms that would otherwise sit empty due to cancellations. Done poorly, it damages your reputation when guests are walked. The key is accurate data — which is why your PMS needs good historical reporting.
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