What is Overbooking And How To Avoid It | 8 Best Tactics
Blog summary:
- Overbooking risk grows with each OTA platform you use
- Only 33% of hoteliers worldwide use a Channel Manager
- One OTA platform states that 25% of its users face overbooking in their first year
- In an overbooking situation, guests often leave negative reviews on social media, your website, or OTA platforms
Overbooking is one of the worst nightmares for vacation rental owners, hoteliers, and property management companies when multiple guests book the same dates. This mistake can happen for various reasons, and it’s most important to spot it quickly and resolve it for both the owner's and the guest's satisfaction.
Research shows that 64% of guests book accommodation through OTA platforms like Booking.com or Airbnb. What does that mean? The risk of overbooking increases for vacation rental owners, hoteliers, and property management companies so caution and full awareness of its risks are essential.
According to the Skift State of Travel 2024 report, only 33% of hoteliers use a Channel Manager worldwide, which is concerning, as the Channel Manager is one of the key tools for hoteliers, vacation rental owners, and property management companies. It automatically syncs availability and prices across all OTA platforms.
In this blog, learn what overbooking is, why it happens, the role of a Channel Manager, how it works, and why it’s so important in preventing overbooking. We’ve also prepared eight tips to help you avoid unwanted double bookings, gain better control over reservations and occupancy, and increase guest satisfaction and your profit.
What is overbooking?
Overbooking, overlapping reservations, duplicate, and double bookings are all terms for a situation when the same night, room, unit, apartment, or vacation home is booked multiple times for the same dates.
All vacation rental owners, regardless of the type of property they manage, must avoid overbooking, the situation where more reservations are made for specific dates than available units.
One OTA platform notes that 25% of its new users will experience overbooking or overlapping reservations in their first year of operation.
This can mean double or multiple bookings for the same apartment, room, or vacation home. It’s a big challenge, especially for new owners, hoteliers, and property management companies.
Overbooking isn’t just a potential source of guest dissatisfaction. Unlike other common booking issues, overbooking leads to damage and the owner cannot provide the confirmed accommodation to the guest. This can result in a bad review, unexpected costs, and a damaged property reputation.
Why does overbooking happen?
Overbooking can happen for many reasons. While it may seem accidental or rare, it usually occurs due to several overlapping factors. It’s important to understand why it happens to avoid it successfully.
Most problems related to overlapping reservations occur during the initial setup of a property on a chosen OTA platform, so it’s important to be careful.
The most common reasons are:
• Mismatch in availability across multiple OTA platforms
• Incorrect cancellation estimates
• Errors in calendar settings
• Human errors
• Manual reservation tracking
• Operating without a Channel Manager
• Technical errors and system downtimes
Find below an explanation for each reason.
Mismatch in availability across sales channels
If availability isn’t synchronized simultaneously across all sales channels like OTA platforms, the property website, or phone reservations, guests can potentially book the same dates twice or more. This often happens due to manual data entry, using unconnected systems, or avoiding a Channel Manager.
A guest confirms a booking, but the unit remains available on other platforms. This means it can still be booked even when it isn’t available.
Incorrect cancellation estimates
Owners often count on some reservations being canceled, especially those made a year before the actual stay. Many apartment owners and hoteliers knowingly accept more reservations than available units.
They rely on cancellations. If that doesn’t happen, excess bookings occur, leading to overbooking.
Errors in calendar settings
The chance of overlap increases if availability isn’t accurate and properly updated in calendar settings. This means that the reserved period isn’t blocked off on all calendars, isn’t closed in time, or part of the reserved period isn’t blocked off unavailable due to an error.
It’s very important to check and monitor basic settings during setup continuously. As mentioned, overbooking often happens due to issues and carelessness during the initial setup of a property on OTA platforms.
Human errors
Overbooking can also happen when multiple people manage reservations without a single booking management system. If there isn’t good, constructive communication within the team, the chance of overlapping reservations rises.
Vacation rental owners, property managers, and hoteliers often closely collaborate with various agencies and external partners. Double bookings often happen due to misunderstandings and infrequent communication.
This can be easily solved with proper onboarding and training of those responsible for managing and monitoring reservations.
Manual reservation tracking
When vacation rental owners or hotels still rely on spreadsheets, notes, or notebooks instead of digital tools, the risk of accidental overlapping bookings increases by 100%.
However, more and more are using a modern property management system with an essential channel manager to prevent overbooking.
Operating without a channel manager
Overlapping can also occur when owners work without a tool to automatically synchronize prices and availability. Mistakes are possible if the property management system or Channel Manager isn’t set up correctly.
It’s easy for a guest to receive a booking confirmation for specific dates and a unit, even though the accommodation is already occupied during that time.
Technical errors and system downtime
While it’s desirable to use modern technologies to manage properties, it’s important to be aware that errors also happen with them.
Slow internet connections, occasional server outages, or software problems can also lead to calendars not updating. The result can be overbooking.
These are the most important reasons for overlapping reservations. It’s important to keep them in mind and always have methods ready to either avoid or fix the damage as soon as possible if it occurs.
The impact of overbooking on rental businesses
Overlapping reservations can negatively affect the daily operations of vacation rental owners, hoteliers, and property management companies, leading to long-term difficulties. Just a few negative reviews can cause significant issues.
Dissatisfied guests and loss
If a guest finds themselves overbooking and you cannot provide the promised accommodation, there’s a high chance they will look for another place. This loses current revenue and future recommendations or repeat visits.
Bad reviews and a damaged reputation
In an overbooking situation, a guest will almost certainly leave a negative review on your social media, website, or OTA platform. Others will read these reviews and reconsider before booking your property.
Increased stress and extra work for employees
Resolving overbooking needs to be quick and is often complicated. Because of that, hotel staff, vacation rental owners, or employees of property management companies lose time and energy that could be used for other, more productive tasks.
Financial costs and profit loss
For the owner, overbooking means both loss of profit and possible new, unplanned expenses. Owners often pay for alternative accommodation for guests or cancellation fees if overbooking happens. Such costs reduce profit and bring unplanned financial burdens.
These consequences are significant, and it’s important to minimize their impact as much as possible. But they don’t have to happen if you use a Channel Manager.
What is the role of a channel manager in preventing overbooking?
A Channel Manager is a tool that enables automatically updating prices and availability of rental units across all OTA platforms simultaneously (e.g., Booking.com, Airbnb, Expedia, own website).
Its primary benefit for vacation rental owners, hoteliers, and property management companies is:
- Centralized reservation management – Instead of logging into each OTA platform, all changes and reservations are made in one system, saving time and reducing errors.
- Automatic synchronization of availability and prices – The Channel Manager tracks all reservations in real-time. If a specific date is booked on one channel, it automatically blocks it on others.
- Time savings and resource optimization – Without manual updates in multiple places, staff and owners can focus on other important tasks.
The Channel Manager is the most important tool in preventing overbooking. Automatically aligning availability and prices across all sales channels, it offers reliable protection against overlapping reservations and helps vacation rental owners, hotels, and property management companies avoid stress and unnecessary costs.
Read more about what a Channel Manager is in the blog.
8 tips to avoid overbooking
Avoiding overbooking is the most important item for successful and stable operations. After all, you want the guest to get the apartment or room they booked, enjoy their stay, leave a positive review, and eventually recommend you to friends and return themselves.
These are direct tips we advise to avoid overlapping reservations:
Use a channel manager
Choose a quality Channel Manager and make full use of its features. It is not just for updating prices and availability; it can also help with sales analysis, reports, and financial tracking of reservations.
Regularly update the calendar
Even with a Channel Manager, manual updates are sometimes unavoidable (e.g., last-minute phone reservations). Make sure to enter them into the system immediately to prevent overlaps.
Clear communication with guests
Ensure cancellation policies and booking terms are clearly highlighted. Informed guests cancel less often at the last moment, and if changes are needed, they are more likely to accept alternative solutions.
Collaborate with reliable partners
Consider the number and type of OTA platforms or travel agencies you work with. Quality partners provide fast and accurate information, which makes maintaining correct availability easier.
Introduce a minimum stay where applicable
Setting minimum stay restrictions during specific periods can prevent unnecessary gaps and reduce the chances of unforeseen short-term bookings.
Arrange backup accommodation
If possible, arrange cooperation with nearby owners of other rental properties so that there is a "Plan B" in case overlapping reservations occur.
Implement systematized procedures for reservations and cancellations
Define a straightforward process for receiving reservations and handling cancellations. All team members should follow the same rules and use the same tools to minimize the risk of error. Also define a crisis plan for dealing with overbooking if it occurs.
Continuous monitoring and analysis of occupancy
Regularly check booking trends, cancellation data, and average occupancy rates. Timely analysis can prevent sudden spikes or drops in reservations.
Applying these tips will create a more stable and predictable reservation system. This will result in a better guest experience, greater confidence in daily operations, and long-term success.
Overbooking is a serious challenge that, if not prevented, can cause financial losses, bad reviews, and damage to reputation. Using a Channel Manager, regularly updating the calendar, and clear communication with guests and reliable partners significantly reduce the risk.
Ultimately, investing in team education and monitoring and analyzing all booking trends are the best ways to create a stable and successful business.
Daniel Herman is a growth marketing enthusiast with 10 years of marketing experience who enjoys thinking strategically and seeing the bigger picture. He writes about everything related to developing marketing activities and KPIs, branding, and taking a long-term approach to success, always with the goal of sharing useful ideas and inspiring action.
