What is overbooking? (noun explanation)

Overbooking: When a hotel is fully booked, it appropriately increases the number of reservations to make up for the idle rooms caused by temporary cancellations by a few guests. For example, there are only 20 available rooms in the Berjaya Hotel on a certain day, but the hotel accepted reservations for 30 rooms and overbooked 10 rooms.

Overbooking can effectively reduce the waste caused by vacant rooms and increase the hotel's revenue. For example, after Chenggong Hotel overbooked 10 rooms, 6 were temporarily canceled and 4 were not checked in. The overbooking just made up for the temporary cancellation and no-occupancy of the vacated rooms, thus avoiding the loss of room revenue.

Extended information:

If a hotel overbooked too much, it would have to pay the price. The tangible economic cost to be paid for this is to arrange for guests who have booked a room but cannot get a room to stay in other hotels. This situation is called a walk in English. According to convention, the hotel has to bear the transportation costs of sending the guests to other hotels. , one night's accommodation fee, and one long-distance phone call fee (if the guest needs to notify relatives and friends of hotel changes). If the guest chooses to come back to stay the next day, the hotel will also bear the return transportation costs.

Sometimes, restaurants have to bear a certain amount of meal expenses, because moving from one restaurant to another is time-consuming, which may delay the guests' meals or make the guests very unhappy. In addition to economic costs, hotels may also pay some intangible costs. Most guests will be unhappy about being arranged to stay in other hotels. Therefore, they may never come back after transferring to other hotels, and the hotel has lost its value forever. This guest and other guests will tell others about their complaints and dissatisfaction with the hotel, thereby affecting the hotel's reputation.

Intangible costs may also appear within the hotel. Usually the guests who are arranged to stay in other hotels are the latest guests to arrive. The person who handles the walk-in situation is the night shift manager or front office staff of the hotel. They directly face complaints and pressure from guests, which will make them unhappy at work. , so they will be resistant to overbooking, and may even complain about the overbooking strategy adopted by the revenue management department, which will cause conflicts between the two departments.