Overbooking occurs when a customers book more rooms than the actual number available in a hotel. The hotel allows this to happen, anticipating that some will cancel.

How does overbooking happen?

An overbooked flight is when an airline sells more tickets on the plane than there are seats. This is a way to avoid empty seats from no-show passengers or missed connections. Overbooked might also be referred to as oversold.

What might be reasons for overbooking?

Even though it is a part of the revenue management strategy, overbooking hotel rooms is purely related to room allocation and inventory management. This is mainly done to insulate hotels from revenue loss that may arise due to no-shows and last-minute reservation cancellations.