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Effective Hotel Room Forecasting and Overbooking Strategies

Learn about forecasting room availability, overbooking dilemma, jargon specific to reservations, and practical models. Understand automated inventory tracking and how to handle cancellations and early departures.

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Effective Hotel Room Forecasting and Overbooking Strategies

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  1. Chapter 3Hotel Structures

  2. Learning Objectives • Understand the various decisions facing a reservations manager with regard to forecasting the number of rooms available for sale. • Understand and discuss the overbooking dilemma. • Define and utilize basic vocabulary terms and industry jargon specific to forecasting availability and overbooking reservations. • The ability to develop a practical working model of both a simple, unadjusted room count and an adjusted room count. • Understand deterrents for cancellations and early departures.

  3. Forecasting Available Rooms (1 of 8) • Automated Inventory Tracking Systems • Computer updates reservations in real time • Shows projections a week at a time • Shows today's arrivals by name, room type, group affiliation, other codes • Shows reservations by quality • Shows room availability by room type and status

  4. Automated Inventory Tracking Systems - Example of A One-Day Rooms Inventory

  5. Forecasting Available Rooms (2 of 8) • Room counts are done for each day in advance. • Less accurate as we look further ahead • Tables next slides • Done many times a day for today. • 6 AM, 11AM, before and after 4/6 PM

  6. Forecasting Available Rooms (3 of 8)

  7. Forecasting Available Rooms (4 of 8) • Committed Rooms= (Yesterdays stayovers + today's reserved arrivals) • Out of Order (OOO) Rooms = Rooms temporarily unavailable due to fixable problems • Can be fixed quickly if absolutely essential • Can be sold at a discount un-fixed, with disclosure • Out of Inventory (OOI) Rooms = Rooms unavailable long-term due to non-fixable problems • Cannot be sold today due to unacceptable condition • Exhibit 4-5 for inventory calculation issues

  8. Forecasting Available Rooms (5a of 8)

  9. Forecasting Available Rooms (5b of 8)

  10. Forecasting Available Rooms (6 of 8) • Stayover - Continuing guest, as per booking • Understay– Guest who leave earlier than expected • Overstay - Guest who stays longer than booked • No show - Guest with confirmed/guaranteed booking who does not arrive, but has not cancelled • Cancellations - provides the opportunity to resell • Early Arrivals - Guest who arrive day/s before booking • Adjusting Toda’s Reservations • The Adjusted Result • Periodic Recounts • Adjusting by Reservation Quality

  11. Forecasting Available Rooms (7 of 8) –Simple & Unadjusted Room Count

  12. Forecasting Available Rooms (8 of 8) –Adjusted Room Count

  13. Overbooking (1 of 8) • Overbooking - More bookings than rooms! • Done deliberately for number of reasons • Some guests will be no-shows • Last minute change of plans • Some guests deliberately make multiple bookings • Some guests will be early departures • Some guests will be last minute cancellations • Too late to fill these last-minute empty rooms • So hotels overbook to protect itself from revenue loss • Done with historical statistics as guide • The Perfect Fill?

  14. Overbooking (2 of 8)

  15. Overbooking (3 of 8) • Reservations as legal contracts. • Courts say that reservations are legal contracts. • However, not worthwhile for individuals to sue. • Meeting planners have sued and won! • Threat of Legislation. • State Legislation • Whose Fault?

  16. Overbooking (4 of 8) • Overbooking Policies • Hotel overbooking solutions. • Check nearby hotels for room availability. • “Walk” overbooked guest to another property. • Chains do it within chain • Watch for unethical FO Clerks who do it for money! • Pay for taxi, phone call, comparable room. • Air-taxi in the Bahamas! • Apologize with gift, etc.

  17. Overbooking (5 of 8)

  18. Overbooking (6 of 8) • Overbooking and antiservice syndrome • Industry should police itself, or congress will pass laws! • Airlines are regulated by law - ask for volunteers and give them money and free tickets • Problem is due to few hotels with poor service • No-Show Policies • Cancellation Policies

  19. Overbooking (7 of 8) –Sample Cancellation Policy of OTAs

  20. Overbooking (8 of 8) • Minimizing the Overbooking Problem. • Increasingly Restrictive Policies. • Early Departure Fees • Third Party Guarantees. • Trip Insurance • Credit Card Disputes • Travel Agent Guarantees • Advance Deposit Reservations.

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