How to Handle Last Minute Overbookings: Emergency Process

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An overbooking/oversell is a situation or reservation which sells a hotel, hostel, Bed & Breakfast, or any accommodation past the number of physical accommodations. In simple terms, you have more guests than rooms/beds.

Handling overbookings and overbooked guests is a difficult situation. However by following the general practices shared below, you should be able to mitigate financial loss, manage guest perception, and strengthen your 3rd party partner’s opinion and belief in your property.

Background

Myallocator (Channel Manager by Cloudbeds) constantly updates and sends the updated availability to all your connected channels. While myallocator helps to reduce overbookings, it is not possible to completely prevent them in today’s marketplace. It is important to keep in mind that most overbookings are caused by the following:

  1. Incorrect room mapping
  2. Myallocator or channel errors
  3. Simultaneous bookings*
  4. Contracted availability directly with channels
  5. Availability update mistake made by the property

*Booking sites give their customers a 10-15 minute "window" to complete their booking. During this time, no availability changes are possible, as they want the guest to be able to complete the booking process.

You can find further information about it on this article: Why did I receive simultaneous bookings?

Many of the most common causes of overbookings above can be eliminated by preventing mistakes in availability settings and room mappings. Additionally, other variables come into play, such as:

  1. How often the channel receives updates
  2. How quickly the channel can process the updates
  3. Any internet speed issues that might play a part

We highly suggest creating a strategy to handle overbooking in the unfortunate case they occur.

Process to handle last minute overbooking

Step 1 - Determine how many overbookings have occurred

At the beginning of the day/or immediately after finding same day overbooking, do the following:

  1. Go to the 'Dashboard'
  2. Check 'Today's Activity' section on the right side
  3. Click on 'Overbookings' tab
  4. Click on the overbooked room and the system will redirect you to the calendar
[Demo] Mountain Resort & SPA - Dashboard - Google Chrome

5. On the calendar, click on the number on the top of the overbooking date

6. Once you click on the number, check the un-assigned reservations on the left side

On the example below, you can see that on Monday 25th, the property has 2 un-assigned reservations

Step 2 - Analyze the Reservations
  1. Determine where the overbooking came from by checking the reservation source. If the reservation came from a connected channel (eg.: Booking.com), make sure the source is no longer open.

If your availability is zero on availability matrix/calendar and your property is still available on channel's website, please contact our support team at support@cloudbeds.com informing the date and room type - one of our customer coaches will investigate the reason for you

  1. Analyze the number of incoming bookings for the day against your normal last minute cancellations and no shows. With this detail you’ll know if you need to relocate reservations. (ex. if you normally have 1 no show/late cancel each day and only have 1 overbooking it may not be necessary to ‘sound the alarm’ yet)
  1. Analyze all the bookings to determine which guest you can relocate. The last received booking isn’t always the best one to relocate!
    • Based on source and agreements some it may be more advantageous to relocate some bookings than others
    • Consider date of booking, rates, agreements, possible penalties from partners, length of stay, guest loyalty, etc
  2. Begin calling other local properties of similar quality/value/service to your own
    • Inquire for availability. At minimum do they have the rooms you need?
    • Inquire for a reciprocal rate for the relocation. Ideally you should get a discounted rate and share the same courtesy for the future
    • Inquire if they can hold the rooms without commitment. If so take them on the offer. If not analyze, is the relocation 100% necessary or can you wait?
If relocation is determined to be 100% necessary
  • If relocation is 100% necessary -  Immediately after following the above steps, contact your third-party booking partner. Advise them of the relocation and where the guest will be relocated to and compensation to be offered
  • If possible, contact the guest in advance and advise - Guests relocated prior to arrival are generally less frustrated and easier to recover than guests sent away at the front desk
    • Inform the guest of the new location
    • Assure them you are confident of the quality of the other property
  • Make sure they know exactly what compensation is being provided

Industry standard typically is 1 night room+tax, transportation to and from relocation hotel, one phone call, and internet access at relocation hotel. Guest returns to your hotel after 1st night for remainder of their stay.

Many hotels offer the industry standard and will upgrade guests upon return or offer some other sort of compensatory action.

If it's a third-party booking: After following the above steps contact your third-party booking partner. Advise them of the relocation and where the guest will be relocated to and detail the compensation to be offered.

If you are not yet sure relocation will be 100% necessary
  • If relocation is not 100% necessary then do not contact your partners yet. No need to sound an alarm until necessary. If you sound the alarm and ultimately don't relocate the guest, it could cause your property to be seen negatively
  • Continue to analyze your situation throughout the day. Ideally you want to relocate prior to guest arrivals, so the sooner you can determine 100% to relocate the better. If you do recognize the need, revert to our process above on 100% necessary relocation
  • If it wasn’t possible to contact the guest in advance or wasn’t determined until arrival that the guest should be relocated, then you will have to handle this task at the front desk.
    • Guests relocated at the desk are generally very frustrated and obviously upset and of course for good reason. These guests can still be recovered with deft and skillful management
  • Display genuine care, empathy, concern and understanding. Be patient, but firm and stand your ground. Don't let the guest’s emotion control yours. They will be upset, you will want to remain patient, friendly, and understanding for the best results. This moment will become your moment to show professionalism and define your business reputation
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