“Any rooms available?,” I asked the friendly staff of a big four-star hotel in central Brussels on Wednesday evening.
“Minus two,” replied the receptionist with a frown. “We’re overbooked.”
Overbooking is popular among airlines. When the process of selling more seats than the capacity of the plane is handled correctly, it works well. If the airline guesses wrong and everyone shows up, staff can throw money at the problem – offering bigger and bigger incentives until someone volunteers to postpone their journey.
With a hotel, it’s different. Typically the overbooking will become evident only when I turn up at 11pm after a long day of travel. The last thing I need is to be told the room I booked in good faith is already occupied, and that I will be accommodated elsewhere. The alternative might be around the corner, or a taxi ride away. Either way, the verb used in the industry is to “walk” the customer to another property.
This has happened to me several times. In Amsterdam, a taxi took me to a perfectly reasonable alternative. In Shropshire, I was invited to bed down in the conference room (pity the poor delegates next morning). And in Dublin, the hotel only realised it had more guests than beds when I returned from my assigned room to reception to report that the place was full of workers’ tools and the door didn’t lock. As it was by now midnight, we agreed that I would stay there, use some heavier tools to keep the door closed and scarper early in the morning. No charge.
After my conversation in Brussels with the hotel, I wanted to find out more. So I called up the professionals: specifically Corin Burr of Bamboo Revenue. His London-based company advises independent luxury hotels on revenue management – which I will characterise as extracting as much cash as possible from each guest while seeking to fill every room.
“It’s a bit of a dark art – essentially flexing price according to supply and demand,” Corin says. “So when hotels are looking busy, the city’s busy, we will enable the hotel to push rates in the right direction.
“When things are not looking so great, we take evasive action and open other channels and flex prices where we can to make them more competitive. A hotel bedroom is a perishable item. Once the night has happened, there’s no getting it back. So the hotels have to stay ahead of the game. Overbooking is a tool that we have in the armoury of managing the hotel’s revenue.”
No-shows are much more likely at big, corporate hotels in cities than small, family-run places in the country. Business customers’ plans can change quickly.
“Disasters happen in airports, as we’ve seen just recently [at London Heathrow], and the hotels have to protect themselves. They may get some cancellation charges here and there, but they’ll also get some arguments about not paying the cancellation charges.
“We know our business very, very well. And we know the hotel’s patterns and behaviours. So we can quite often predict when we’ll be fine if we overbook by a few rooms. If you’re a sizeable hotel of 200-300 bedrooms, then having a 50-room group or 100-room group is not unusual.”
It is very likely that some of those guests will no-show – so likely that the industry has another bit of jargon: “wash”, meaning a group booking where the full allotment of rooms is not taken up.
“Their plans change, and if you know that a group’s probably going to wash a few rooms, either the group pays for the unused room or the hotel resells it.”
Better to have beds occupied – with guests likely to be spending in the hotel bar or restaurant – than left empty.
But before going beyond 100 per cent occupancy, Corin and his team will look at what else is going on in the city.
“The last thing you want to do is overbook [in London] knowing that the closest hotel is at Gatwick airport.”
Sometimes, says Corin, overbooking happens inadvertently – because one or more rooms are unexpectedly unavailable. Damage, plumbing faults or guests overstaying their welcome.
“All of those things happen. I’ve seen some situations where guests have been booked out and the hotel’s paid for their room in the other place, a taxi to and from and the promise, ‘Come back and we’ll upgrade you into a suite for the remainder of your stay’. They’re trying to make good for what was never an intentional overbooking.”
Back in Brussels, I was keen to find a room before nightfall. Along at Hôtel La Grande Cloche, I was assured: “Brussels is sold out tonight.” Besides all the usual Euro-business, a big aviation conference was in town the next day.
Fortunately, I was happy to make do with two stars, not four. The Hotel Barry was prepared to sell me the last double room for €130 (£109) for single occupancy. It was a decent deal for an overbooked city.
