Glossary / Pricing & strategy

Overbooking

Definition

Overbooking is the practice of accepting more reservations than you have rooms, on the assumption that some will cancel or no-show. A 100-room hotel accepting 105 reservations for tonight is overbooking by 5%.

What it tells you

Overbooking trades two risks: empty rooms (cost: lost RevPAR) vs. walked guests (cost: relocation + reputation). The right level depends on your cancellation and no-show patterns by segment and lead time.

How to track it

Most PMS support overbooking levels. The supporting analysis — cancellation rates by segment, no-show rates — lives in BI reporting.

Where it fits

Standard practice for properties with reliable cancellation patterns. The discipline is to know your wash factor (the expected percentage that won’t arrive) by segment and apply it consistently.

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