22 May Overbooking & Outbooking – How to handle it!
I regularly review the search terms used for finding my site, and by far the most common searches relate to outbooking and overbooking. Surprisingly when searching, there is no definitive standard for outbooking guests and there is not really anything that tells you what to do, what to say and how to actually manage the situation; so I started writing a book on the subject! Until then, here are my top tips and advisories on what to do and how to do it, when it comes to being overbooked.
Decide whether you will outbook PROACTIVELY or REACTIVELY.
As a general rule, most hotels will use a reactive approach to out booking – this is where guests will be outbooked as they arrive. This is okay if you only have a few rooms to potentially outbook to another hotel, but is very stressful if you have multiple rooms to outbook. As a general rule, your overbooking level will indicate how many non-arrivals you are likely to receive for that day. The decision on what type of outbooking to use is down to each hotel, but you must ensure you review your arrivals and stay-overs and assess whether it is likely each of those bookings will turn up.
Once you have an idea of what likelihood you have of bookings turning up, you need to decide whether your overbooking amount needs dealing with prior to arrival or not – as a general guideline, being overbooked by up to 50% of your overbooking limit, with everyone likely to arrive, can be dealt with on arrival. Anything above this should be pro-actively dealt with.
If you have a group in, that have taken most rooms, and forced you overbooked; you must outbook your transient guests proactively. Proactive outbooking is where you contact guests prior to their arrival to let them know that they will not be accommodated at the hotel and to be advised of the alternate arrangements that have been made.
Decide who is going where
You must also assess which type of bookings can be moved to another hotel for the date you are overbooked. As a general rule you should place the bookings in the following order where number 1 is the most likely to be outbooked, and the further down the list the booking type is, the more business impact will be had by outbooking them:
- Staff bookings – any staff who are staying at the hotel should be the first to move to give you space. Staff may not be pleased but are most likely to understand the scenario
- Transient, one-night leisure guests – guests who are not with a group or company and are only in for one night. As a rule start with the most recently booked rooms (avoid keeping a guest in the hotel who booked last night at the last minute, over the guest who booked 6 months ago, also try and retain the cheaper rate guests as moving them to another hotel will cost you less)
- Transient, two-night leisure guests
- Corporate, one-night guests – guests who are having their bill paid for by a company, or have had their reservation made by their business
- Corporate, two-night guests
- Smaller Groups – Small groups of people (i.e. families, parties of people), who are not having an event at the hotel
- Mid-size groups – only if you really are severely overbooked. Again they must not be holding an event at the hotel
- Larger groups
- Event and Conference Delegates – overbooking must be very serious to be considering moving these to other hotels.
- VIPs -these should not ever be outbooked, but it may be necessary.
Draw up a list of the local hotels and the guests who are decided for moving. If reactively booking, you should check other hotels availability every hour to ensure you do not send a guest to a hotel that is now full. If other hotels are full, or filling quickly, consider holding a few bedrooms for your outbookings – it may cost you to do this so be aware of the cancellation policies.
Negotiate rates and billing
A guest should never have to pay for their own outbooking. In many cases the hotel will have a billing agreement or similar in pace that allows for items to be billed back to the original hotel. In many cases a hotel will throw a load of free stuff at an outbooked guest and in many cases this is absolutely unnecessary, particularly from a legal standpoint (unless otherwise specified, this relates to UK law) – hotels have a contract to provide accommodation, if accommodation is provided (even at another hotel) then the contract is being adhered to as long as the accommodation is of the same standard. In many cases a hotel should upgrade the guest when they are moved to a different hotel, and under no circumstances should a guest be outbooked to a hotel that has not been visited by a member of management from the original hotel, to ensure that the accommodation is of a good standard.
It is also important that you avoid throwing in extras – if a guest has booked on bed and breakfast, then get them bed and breakfast at the other hotel – only offer extras if the guest is extremely unhappy because by offering everything straight away, you are providing much more than the guest has paid for (and increasing the cost to your hotel), and also leaving yourself with nothing to offer if there is a complaint.
Once you have finalised where to send people, rates agreed and billing arrangements, you need to start dealing with the guests.
Dealing with the guest
This is probably the worst part! If the guest is contacted proactively it can make a huge difference to how the matter is handled and received by the guest. You can never anticipate exactly how a guest will deal with being outbooked, and a lot of guests will see it as victimisation of them, after all, everyone else who booked a room that night is staying there so why can’t they? So you need to be sensitive, and honest!
Many hotels will invent elaborate excuses for sending people to other hotels, from maintenance issues to sickness and refurbishment; don’t get me wrong, as sometimes these are the real reasons behind being overbooked – many a hotel has fallen foul of over-running refurbishments or decoration works, staff sickness and collapsed ceilings; but when you are overbooked because the hotel is simply oversold, then be honest! Explain to the guest that the hotel is oversold because of (insert reason here – i.e. large numbers for a conference, sudden surge in bookings owing to an event) and that to guarantee them a bedroom, you have arranged alternate accommodation at another hotel. The general rule here is to present your case with the three key elements to ensure smooth acceptance:
- Problem – explain you are overbooked
- Reason – explain why you are overbooked
- Solution – offer your solution to the problem
It is important that if you do decide to use an excuse (aka a lie), then hand this over to all personnel so everyone can keep to the same story! It is also necessary to ensure quick delivery of the outbooking information, leaving no argument opportunity from the guest. For example, tell them that you are overbooked, and that you have made alternate arrangements, so they will staying at another hotel and there will be no additional cost to them.
An example script I use is:
“We are oversold this evening, so we have made arrangements for your booking to be upgraded to the [xxxxx] hotel located just a few minutes away, where we will be paying the difference in cost for you. Di you come in a car or would you like me to arrange a complimentary taxi for you?”
It may seem short and sweet, but everything we need to say is there! If someone challenges why we are oversold:
“On almost every night of the week we have guests who do not arrive, usually 2 or 3 bedrooms. As in the airline industry, we do oversell on occasion because of these non-arrivals; however this evening we have [had everyone arrive/had all reservations confirm their arrival] so we do have to move some guests to other hotels in the area. It is a rare occurrence and I am really sorry we have to do this but we will do all we can to ensure you have a great stay at [name of other hotel]”
This should give you an idea of how to start dealing with overbooking and outbooking – the most important thing is to stand your ground; there are a few final tricks you can use to help reduce overbooking and to alleviate the strain:
- Make a decision and stick to it – if the next guest through the door is being outbooked, stand your ground. Do not ‘suddenly find a room’ for them (i.e. decide to outbook someone else). Explain you are at capacity and there is physically no room for them.
- Ask groups to share – if you have 10 women arriving who have booked 10 rooms (one each) and you are three rooms overbooked, see if some of the women are willing to share a room in exchange for a free room/bottle of wine/refund (all cheaper options than outbooking)
- Upgrade people – I know of some hotels who would prefer to outbook people, rather than giving people upgrades; this is ridiculous. An easy way to resolve is to offer cut-price upgrades as people arrive – you actually might sell an upgrade and resolve your overbooking issue without having to give away free upgrades.
- There are a few unscrupulous tricks you can use to prevent overbooking on busy nights that I will not cover here – each hotel has their own.