Managing bookings can be a struggle for many hotels. Some hotels may suffer because of underbooking, while others may have been overbooking or double-booking rooms. Problems with booking management are a surefire way to cause your profits to plummet. It can result in a poor guest experience and ultimately drive guests to other hotels for their future trips.
To prevent issues because of poor booking management, it is important to understand what each of these types of booking problems mean.
What Is Overbooking in Hotels?
To define overbooking in a hotel, you first have to understand the reasons for overbooking in hotels. Hotels are overbooked either accidentally, when all the sources of booking are not synced, or deliberately as a revenue strategy.
Overbooking is the process of selling more rooms than you have available in the hotel inventory. This is a strategy that many hotels use to ensure occupancy because they don’t want to lose revenue on empty rooms when there are cancellations, or when a guest does not check-in.
Many hotels, particularly smaller ones, overbook their rooms because they do not process credit cards or take a deposit at the time of booking. They say that there isn’t anything they can do when the guests cancel at the last minute or don’t show up at all. This is a problem. Without a credit card guarantee or a deposit, hotels can’t enforce their cancellation policies. Therefore, it is important for hotels to have a Property Management System (PMS) that will allow them to book hotel rooms efficiently and process any payments or a credit card guarantee at the time of booking. A PMS can ensure that the hotelier has the information on hand to process a fee amendment or charge a cancellation fee in case the guest cancels or doesn’t check-in.
In addition, a quality PMS like Hotelogix PMS allows hoteliers to make an informed decision while overbooking, using the many reports and metrics that can be generated within the system. This helps make the process of overbooking as a revenue strategy relatively risk free.
If all guests that have been booked show up, it would be a very difficult situation to handle as you will have no more rooms available. This would create a bad guest experience, and result in bad reviews and ratings which may affect how future patrons view your hotel. Even in a scenario where the room type that has been booked is unavailable and you have to downgrade a guest, it would cause a lot of dissatisfaction.
Using a PMS with a channel manager can help manage and sync bookings from various sources and platforms.
What Is Double Booking in Hotels?
Double booking in a hotel means that you have two or more guests booked for the same room on the same date. This can happen either when you overbook, or when you do not have a quality inventory management system set up with a channel manager.
A guest who arrives at the hotel only to find that their room has been given to someone else is justifiably upset. And dealing with such a guest is not an experience any hotelier aims to have. The upset patron will most likely head online to leave you a bad review and express their experience with your hotel to a larger audience. This can have a cascading effect on how people view your hotel.
You might wonder how to handle double booking, when you aren’t overbooking. Rooms can get double-booked when there are other channels that are funneling travelers to your hotel, allowing them to book rooms outside your website. There are many online travel agencies (OTAs) operating today, such as Expedia and TripAdvisor, which enable customers to compare hotels and book online through their sites. This leads to an increase in the rooms reserved from your hotel. However, without a channel manager to update the inventory in real-time, there is a risk of double booking because people are booking the same rooms through multiple channels.
The best way to prevent double booking is by using a PMS that has proper channel management. The channel manager automatically updates your inventory over all your booking platforms when a guest makes a booking on any channel. There is real time update of room availability and reservations, eliminating the risk of double booking a room.
Hotelogix PMS is integrated with a channel manager that updates the reservations on your PMS and updates the room availability on your various OTAs and other booking platforms, as soon as the bookings are made. This reduces the loss in any revenue due to cancellations, no shows and checkouts, while also preventing overbooking and double booking of rooms.
While you may have heard about double booking, you may have also heard about double occupancy. It’s important not to confuse the two. What does double occupancy mean when booking a hotel? It simply means that two people will be staying in the same room.
What Is Underbooking in Hotels?
In some instances, hotels will attempt to reduce double-booking by providing separate allotments for each of their distribution channels. This will eliminate the possibility of selling the same room more than once, but it can also cause units to remain vacant. One channel might sell all their inventory and then have to turn away potential guests, while there are still vacancies available on other platforms. The guests might not know about those other platforms and may assume that the hotel is entirely booked. They will then likely look for another hotel in the area on the same channel they had been using.
Instead of following this strategy, it is a far better idea to use a pooled inventory system. When you have a high-quality PMS integrated with a channel manager, you will find that it is easier to manage reservations across all channels. As mentioned previously, the channel manager will update the room availability across all the channels. You do not have to worry about double booking, and the travelers will be able to access your full inventory regardless of the platform they are using. This ensures that you are not losing out on revenue by underbooking rooms.
Prevent These Issues With A High-Quality PMS
There are various simple PMS available that might seem like a good option at first glance. However, they are going to lack proper channel management to help deal with the problems mentioned above. Instead, you will want to choose a high-end PMS like Hotelogix to manage your reservations. The system offers a quality channel manager that automates updates across all booking channels. It provides you with the necessary tools that you need to make informed choices and ensures that you never accidently overbook, underbook or double book a room, ever again.
Hotelogix system and has various other features in addition to the channel management system that makes managing your hotel operations very simple. It could be a stellar solution for your hotel management needs.