Overbooking Practices in Hotel Revenue Management

Overbook strategically to account for no-shows and minimize costs, uncertainty, and customer impact. Examine visiting groups' costs and revenues to identify profitable targets.

Description

Businesses that accept reservations must cope with the problem of no-shows: customers who make a reservation but fail to honor it. Hotels can protect themselves against revenue lost from no-shows and generate increased revenue by overbooking. This course teaches you how to strategically overbook and how to manage issues associated with overbooking, as well as how to evaluate groups and determine which rates to charge.

This course explores the components of a successful overbooking strategy including no-show forecasting, no-show rates, arrival uncertainty, pricing policies, and cancellation forecasts. It explores the risks of overbooking and presents strategies to minimize costs and mitigate customer impact.

To fully realize your property’s revenue potential, you must be able to manage group reservations. This course teaches you how to create a group forecast and explores yieldable and non-yieldable business and incremental group costs and revenue opportunities. It introduces models to calculate displacement costs and contribution margins to determine which groups are most profitable.

Participants use Microsoft Excel to practice overbooking and group-management techniques.

Who Should Take This Course?

This course is designed for hospitality managers, general managers, revenue managers, and other hospitality professionals responsible for the financial performance of their organization.

Benefits to the Learner

Participants who complete this course will be able to:

• Develop an overbooking approach
• Manage issues associated with overbooking
Evaluate groups
• Determine appropriate group rates

Authoring Faculty

Sheryl E. Kimes, Ph.D., Professor

Sponsoring School

Cornell University's School of Hotel Administration

Total Learning Time

Approximately five to six hours over a period of two weeks.

Certificate Information

This course can be applied toward the following certificate:

• Hotel Revenue Management

Other Requirements

Use of Microsoft Excel is required for this course.