Every industry has its fair share of tricks to get the most out of every transaction. But these methods can only fail under experienced hands, because they can easily turn from a great way of maximising business to an entrepreneurial nightmare. The hotelier business is no exception, and their worst-case scenario is called walking.
The Hotel Overfloweth
Resort Brokers Australia shares that the one and only goal of hotel management is to ensure that every room in their establishment is occupied. Customer service, amenities, beautiful views, and seasonal promotions all work to serve that single-minded objective. But life sometimes gets in the way of fulfilling that dream when booked guests suddenly cancel or don’t show up at all. This is where the industry trick comes into play – overbooking.
Overbooking is when hoteliers reserve more guests than their official capacity; they do this whenever there are guests who have a high cancellation risk. This way, hotels can still fill their rooms even if some of the guests don’t show up. Overbooking sounds like a clever insurance policy, that is, unless everyone who booked a room manages to show up.
Walking the Plank
The downside of overbooking is that there’s a possibility that there will be groups of people standing in the lobby with rooms in their names occupied by other guests. In such cases, hotels have no other choice than to walk their guests. This is what people call it when hotel management pays for a guest’s stay at another hotel. Just imagine if Pepsi had to buy one of their customers a Coca-Cola because they ran out of stock, it’s enough to send a shiver up the spine.
Overbooking is a double-edged sword that only people who’ve spent years in the industry can even begin to consider. The risk-reward matrix involves too many variables,such as weather patterns, customer behaviour, and current events for anyone with less experience to account for with enough confidence to be effective.To be fair, walking is a very rare scenario since cancellations happen on a daily basis, but is anyone really looking for the risk?