Overbooking Rooms in the Hotel Industry If one were to ponder the question of whether hotels should overbook their rooms the answer may appear to be quite simple. Why would a hotel owner want to book more reservations for rooms than they actually had available? This is an issue that has faced the hotel industry for a number of years. Contrary to what the average person may think about hotels overbooking their rooms, it has actually shown itself to be a noble strategy in achieving maximum profitability when done accurately. It is imperative that it is done in an appropriate manner so as to not give the hotel a corrupt name or lead to guest dissatisfaction.
Having a knowledge about overbooking and what impacts it can have on a hotel are key
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The hope is to have all the rooms on the property occupied on any given night; due to the fact of no-shows and cancellations hotels may decide to overbook. Though hotel overbooking can offer success to a vast array of hotels, it is clear that there are also some disadvantages that could spawn from it. In his article, “The Impact of Overbooking on Hotels’ Operation Management,” Vladimir Sashov Zhechev notes some of the possible consequences that could result from overbooking when all of the guests do actually show up that had a reservation. For example, if a customer has made a reservation at a certain hotel and arrives there only to discover that their room has been given to another guest who also had a reservation, it is only logical that the guest is going to be quite irate. It is now the duty of the hotel to arrange for that customer to have alternate lodging accommodations, as well as provide transportation for them to get to their other destination (Zhechev et. al Ivanov 7). Additionally, the hotel may offer the guest a free night on their stay or their next stay due to the complications they have just experienced. This now has ended up costing the hotel money that it will have to take as a
My group previously visited the Sheraton Hotel for our first interview with the front desk manager and it went very well. We decided to keep with the same hotel for our next interview, but due to a last-minute cancellation from the housekeeping manager we were not able to complete the interview. Due to this situation, I will be talking about a whole different hotel - G6 Hospitality. The name G6 Hospitality refers to the hotel brands – Motel 6 and Studio 6. I chose to G6 Hospitality because it is a well-known company that I wanted to know about more in-depth. From all my research, I have gained a lot of insight on what G6 Hospitality is all about.
This study will make inferences by content analysis in line with “Analyzing the Use of an Advance Booking Curve in Forecasting Hotel Reservations” “Hotel reservation methods--a discriminant analysis of practices in English Hotels” “A comparison of forecasting methods for hotel revenue Management”. As well company information from annual reports (2014 and 2015) will be analyzed with regard to occurred reservation system failures to conclude recommendation for how capacity utilization and demand management can be enhanced by updating current reservation system with better forecasting capabilities.
Additionally, it measures the speed with which to institute restrictions on non refundable rates, length of stay in the facility and prediction of arrivals. As a management toll, revenue management has enhanced cost control, distribution channels and getting the right marketing mix in the business. In summary, revenue management is critical in the hotel industry for sales of rooms and services as the main products at the right price, time and right
even if it is the customer’s first use of a new hotel. When this is in
A hotel manager is accountable for the day-to-day functioning of a hotel and its staff. They have trade responsibilities for financial and budgeting management, organizing, planning and directing all hotel services, including front-of-house (concierge, reservations, reception), housekeeping and food and beverage operati...
Overbooking is a strategy that is usually being used by airlines and hotels when they are trying to achieve their objective. The objectives of these companies are usually financial goals that the company would want to achieve. How they would do this is by taking in more reservation than there are rooms available or seats available from the hotel and from the plane respectively. A step for the hotel to achieve the financial goals is to have a 100% occupancy rate of the rooms so...
The first situation is that of “special events” such as holiday periods, sporting/political events, etc. These events throw more power in the relationship to industry players due to the large customer demand and constrained supply. For example hotels see huge demand around the World Cup sporting event and hotel prices as a result on average spike between 100-300% compared to normal levels and for the last World Cup prices in one city went even further north of around 583% (Mallén, 2013). On the flip side, periods of economic recession have the opposite affect by impacting demand negatively thus forcing hotels to greatly lower prices to spur demand or compete with other industry players. During the last US recession, the average hotel occupancy rate dropped to a record low of 45% at one point from the normal average of 63%. As a result of the greatly declining revenues, such as a 48% drop by Marriott International, industry players laid off over 400,000 employees and greatly scaled back costs and new developments. Also importantly to customers who now saw more power in the relationship drift to their side during this time period, the average daily room price dropped to $98.18 (2009) from the record high of $107.42 pre-recession (2008). Both effects on opposing fulcrums show how important customer demand can affect the industry and the players’ actions
Rising number of complaints: overbooking the resort due to the communication problem between head office and the resort, and as a result the resort is understaffed and offering a low quality of service to the customer.
The Hotel industry has become very important in the past years due to immense traveling and growth of international business. Hotel industry not only plays an important role in the life of people but as well as the economy of the country. Development and advancement in the Hotel industry have rapidly been taking place and especially since the rapid change in technology, it is very important for hotels to be promptly keeping up to date. When the hotel industry is spoken of, there are many famous hotels but one hotel company that has been outstanding in growth and other aspects of business, like in Leadership, Teamwork (Employee turnover), Motivation (Customer retention and satisfaction, Goals and objectives, (changing the way hotel business has worked), and Change within the company; structurally inside and physically outside, adding elements, like entertainment, gaming, and outdoor activities, is the Hilton Hotel Company.
c) Owners of the Hotel Buildings – that they need to keep their facilities in tip top condition or else customers will be dissatisfied with their experience and demand their money back.
Room and rate assignment , creating a guest folio and special requirements helps managers plan. Pre registration is used to select specific rooms for guests , picking them up from the air port i.e. arranging a taxi and also dietary requirements. Because of pre registration , front office can notify housekeeping on the guests request by viewing their history records and memo’s for specific requests and preferences.
“The objective of this phase is to identify events and or future trends that will affect the hotel industry over the next five years. Also, the impact that those events and trends will have on your business in terms of cost and revenue changes and the timing of the impact.” (Fedele, 2010) For each of the external environment, it is also to identify what will affect the performance of the business.
Whitla, P., Walters, P., Davies, H. 2007, Global strategies in the international hotel industry, Hospitality Management, vol. 26, pp. 777–792.
The frontal office of large hotels mostly uses a computerized system to manage the guest information and pass it to other departments in the hotel. The frontal office is made up of a team of people with each person having various responsibilities in handling the guests. For the small hotels front office, the reception desk may not be computerized and mostly the reception area handles all the guest information and also carries out other tasks such as showing guest to their rooms. In general the small hotels do not have a team of people or at times has very few people in handling the guests. (Bardi, 2006)
The pricing factor is almost hard to match by the hotel industry, as the consumer is becoming more demanding but also exigent in terms of low pricing. Switching costs range from negligible to high, but a factor that motels can’t substitute are the various benefits including spas, restaurants, or a community holiday feel brought with the package of any chosen hotel/motel. But the consumers in the US, for example, see the switch as more of a necessity rather than a choice, this puts them in an affluent position and the threat from substitutes is likely to diminish. The solution then lies in expansion where mitigation usually takes place, and therefore in turn threatens the substitutes by expanding in the new low cost and service field. Some of these low-cost hospitality choices have expanded thanks to technology and brought to life a new era of cost comparison.