Your hotel is facing revenue loss from a no-show reservation. How will you tackle this financial challenge?

Overbooking is NOT a reliable method and a poor ethical policy based upon "revenue". For one thing, the guest "chose" your hotel for a reason. As they say in the industry, "One disgruntled guest tells at least 350 others (1 a day) but a satisfied guest will recommend to only their closest family and friends." A full house is an operational risk. Preferred method especially for peak seasons would be to "keep" a number of rooms (based upon statistics) to accommodate walk-ins, special upgrades, and for emergencies where a room becomes unusable for safety, security and well-being of the guests. Availability of operational "options" is key to operational efficiency and quality guest service. Quality guest service is the key to reputation.

overbooking is your last option to activate once you tacitly agree with your guest of a reasonable time for your mission to be fulfilled: accommodating any other person looking for a room to stay comfortably. Your property have cancelation policies in place and guarantees that has to be respected just like other rules we abide to due to our business ; but more importantly you and your team have plenty more information than your no show guest that you should use according to the time left before 'financially closing that operating day'. See then the possibilities for generating incomes in other ways (upselling, conciergerie, one competitor that had overbooked ...) to compensate: after all, that no-show was not the only guest in your hotel!

Here are a few strategies: Prepayment or Deposit for High-Demand Periods Flexible Cancellation Policies with Incentives Credit Card Guarantees and Authorizations Targeted Reminder System Last-Minute Booking Promotions No-Show Membership Penalties Dynamic Pricing Adjustments for No-Show Risk These strategies can not only tackle the immediate problem but also create long-term improvements in guest communication, loyalty, and overall revenue management.

Based on my experience, paying a deposit means guests have made a financial commitment, showing they’re serious about their booking and reducing fake reservations. Since they don’t want to lose the money they’ve paid, they’re more likely to show up on time.

If this was 5-10 years ago this would be a much more difficult sell for operations to adopt and guests to want to adhere to. However now in 2024, with the myriad service fees and other additional deposits needed for events or high in demand reservations, it is something that guests are more than used to and you should make sure to train your staff, particularly host team, how to speak with guests who take issue with it. Most booking platforms now automatically layer it into the process, enforcing guests to enter CC information to hold their reservation and charging per head for not giving ample cancellation. Don't be greedy and look at what others are doing to have a competitive fee that isn't offputting.

Given the technology today, this is probably the most efficient and reliable method to "reduce" the number of cancellations and no-shows while assuring some revenue. The key as always is "communication" as to the policies and procedures. The amount to be charged depends upon the cancellation policy deadlines and reservation systems and contractors (such as Expedia) used that determines how may hours or days it takes to get new reservations, and if there is a "waiting list" system in place. An ability to "refund" deposits for certified emergency cancellations and no show is highly recommended if this system is used.

Clear cancelation policies for everyone is where you prove your professionalism to anyone. While patterns are in place on how to deal with late cancellations and while every guest story is unique in itself, your work is to ensure a collective amount of satisfaction, and that starts by turning words into action.

Here it is interesting to note that the use of internet communication technology such as automated answering systems (AI) along with direct non-human reservation systems while time and labor saving and efficient, often cannot recognize the "human aspects" of the guests making reservations. There have been many reported and unreported incidents of "undesirable" and "unwanted" guests making reservations. Taking reservation and improving occupancy just for revenue, can often be detrimental to the over all operation and reputation. So a system of regular first and followup with guest reservation is important. The key is to have greater number of desired repeat and referral guest and may not be just for high occupancy and less no shows.

NON PRESENTATIONS or LATE CANCELATIONS plus TAKING CARE IT IS NOT AFFECTING YOUR REPUTATION equals to 0 POINTS, NO EXTRA COUPONS.

Here to have less "options" for "optional" incentives and benefits may be much more desirable. There is nothing "free" in this world and everyone knows that. And any "discount" always decreases the value and image of the room. Literally the "discounted"amount is imaged and taken as the "bait" and the actual value of the room is much less, since the hotel is making a profit even at that price. Instead, give ALL guests the choice to access the best available services and benefits available for a fee. Just have "sales" or "specials" for all guests when for a promotion. Regardless of the rooms chosen they are all your hotel's guests.

Here it is important that revenue management do not emphasize room occupancy rate based upon cancellation and no-show rates. Instead the emphasis must be based upon the acceptability and preference level of the hotel facility and its services as well as the market and the targeting of that market before reservations. The key is in getting good reliable guests to make reservations and to become repeat guests that bring referrals. Revenues do not make much sense if more is being spent on getting new guests that are not loyal or reliable but on "pricing" which the internet and technology forces all to do, just to get occupancy.

Spend time in developing strong GBS database. 'GBS' correspond to Good Business Sense among your team. Remember that with one software you a have billions of possibilities, but as a human you don't have billions of seconds to make a decision; nor do you believe in the myth of 100% resource utilization. Collectively with the current knowledge aggregated you have real-time insights of your business and your market. Then you decide of your strategy, adjust timely, record by communicating it and communicating it again just to make sure it wasn't a worthless decision. Analyze results calmly measuring the effects of that Revenue Management Optimization trick to counter financial impact of no-shows; And do it again if your targets still unmet??