How to handle an overbooking situation
Following United Airlines’ appalling treatment of passengers and its poor handling of an overbooking situation, I felt compelled to write this article about how to manage overbooking. If you have not seen it, the video is below.
Source: El Confidencial. Although overbooking is permitted in some countries, it is worth remembering a few things. First, let’s recall what the law says:
“You are entitled to accommodation in a property in the same area, of the same or a higher category, and under similar conditions to those agreed. As provided for in section 3 of the same article, you are also entitled to have the travel costs to the final accommodation covered, any price difference, if applicable, and any other expenses until you are finally accommodated, provided these do not result from the user’s own misconduct.”
It is undoubtedly a situation none of the parties wants to face and, in a way, it reflects poor hotel management. Overbooking can happen for several reasons, including:
- Poor cancellation forecasting for a particular date.
- Channel manager buffer errors or booking delivery issues. Some channel managers provide reports to detect these errors. I check them daily, and they have reduced the problems caused by these issues by almost 100%. If you do not have such reports, ask your channel manager to develop them. You may also want to read my article on why hotels should reduce allotments.
- A tour operator fails to send the voucher. This can happen. It may be unclear whether the issue was caused by the tour operator or our email service, but the hotel has to deal with it and respond accordingly.
- A booking is missed during the final review before arrival. A voucher may include two bookings instead of one, or one booking in a multiple reservation may be cancelled instead of all of them.
If one of these situations has occurred, it is an overbooking case, plain and simple, and we should take the right steps to manage it. Here are some ways to reduce the guest’s frustration and stress while giving the reservations agent or tour operator the tools to help, depending on the situation.
Six ways to manage an overbooking
- Call every guest to confirm the booking. If the arrival date is approaching and the overbooking remains, call each guest whose contact details you have to confirm their reservation. Sometimes a call helps clear the overbooking (“a couple of friends who can no longer come”, “something has come up…”). That gives us a chance to anticipate a no-show or a last-minute cancellation.
- Tell guests before they reach reception. If you already know that a guest will not be able to stay at your hotel, do not make them travel all the way to the front desk. They may have come a long way and looked forward to this moment for a long time. Both the receptionist and the guest will have a difficult experience. If you do not have the guest’s contact details, notify the tour operator.
- Offer an alternative date with a discount and an upgrade. A high percentage of guests would be willing to change their dates if offered a discount and an upgrade to their room or meal plan.
- Upgrade the room or meal plan. Do not stop at what the law requires. Your hotel’s reputation is at stake, and word of mouth can do more damage than you might expect. As I often say, the cost (or investment 🙂) of making things right with a guest is small change. If you relocate a guest whose booking included bed and breakfast, upgrade them to half board or offer a spa session at the new hotel.
- Follow up by email or phone a few days later. Since we got it wrong, we should send an email or call to offer a formal apology and preferential treatment—perhaps a complimentary stay, a discount or an upgrade—and invite the guest to visit our hotel in the future.
- If they return, do not let them down. You are using your last chance. Treat them like a VIP and give them your full attention.
I hope these six steps help you manage overbooking at your property. I would be glad to hear about any other measures you use so we can expand the list.