12 Jan

Ask the expert: Hotel overbookings – why does it happen?

Ask the expert

I’ve recently started work at an ABTA travel agency and we had a customer whose original booking was cancelled due to the hotel being overbooked. The tour operator found them alternative accommodation, but I’m confused as to how this happened in the first place, surely the tour operator must know how many rooms are available at a hotel when they sell their holidays?
You are not alone in finding the practice of overbooking confusing and it is frustrating for customers, tour operators and travel agents alike when it happens. 

Firstly, it is important to clarify which company in the chain is responsible for creating an overbooking, and in the vast majority of cases, it will be the hotel or other form of accommodation provider. 

For example, if a hotel has 100 rooms, they may sell 102 rooms on the basis that at least two pre-bookings will cancel, thereby ensuring that they will remain fully booked. In general a percentage of bookings will cancel before arrival. So, there isn’t a problem if they do have cancellations, but if this does not happen, they will be overbooked. The hotel they will then contact the tour operator to explain that they cannot provide certain rooms. 

The problem then reverts to the tour operator. It will have a contract with the customer to provide suitable accommodation in line with the original booking and it must go out and find an alternative which the customer is happy to accept. This is not always easy, as overbookings are much more likely to occur at peak periods when accommodation is at a premium. If the tour operator can’t come up with a suitable alternative, the customer may choose to accept the alternative but also insist on compensation, or instead, choose a full refund of the package cost, plus compensation.

Too often the perception from the customer and also the media, is that the tour operator has created the overbooking, either through negligence or for some other reason.

However, the reality is that overbookings are very much not in the interest of tour operators, they understandably annoy customers as well as causing inconvenience and extra work and expense for the tour operator, which may well end up paying above the odds for new accommodation, plus potentially compensation to an already disgruntled customer.

Finally, I must stress that overbooked accommodation only affects a small percentage of bookings, and when it does happen tour operators generally do an excellent job in resolving the problem to the customers satisfaction. 

Another area where overbooking can occur is airline seats, but that’s a story for another day.  

Daryl Nurthen, Member Support Manager, ABTA