| >Now, I make some consulting work for a small, independent, hotel, and - luckily enough - even if it is "cheaper" to overbook, the management holds the care and respect for the customer well above that. Overbooking and caring about the customer is a completely different thing. Overbooking is about running a business. We are almost on 2020 and currently its a stats game for any business out there. In order to min/max my own business I have to overbook, that's how i'll turn profit. Caring and respecting the customer - anyone that is not doing that shouldn't be running a hotel imho. (Ryanair as an example should never ever run a hotel) Also on hotels you do have ratings nowadays, service is not something you can compromise on. If you are having unhappy customers then that will show on your tripadvisor, booking.com, hotels.com and whatever have you. Then you'll have to drop your prices, meaning making less and devaluing your product.
Customer service/happiness should be the number one priority for any hotel out there. My kind of hotel allows me to make a profit by capitalizing on overbookings. I've kept the hotel on 4 stars whilst is an actual 5 star hotel with all the amenities a 5 stars hotel has. I kept it that way because the expectations of the customer are lower when they visit a 4 star hotel vs a 5 star hotel. The pricing nowadays doesn't go by stars anyways it goes by rating. The higher your ratings and publicity the higher your price. There is less than a handful of 5 stars around me that can be more expensive than I am. The rest of them are cheaper due to their ratings/size etc. When a customer arrives and learns that his room has been overbooked, he also learns that he'll be staying at a close-by hotel that usually is of 5 stars. The quality of the hotel that I'll put my customer because he remains my customer is either similar or higher than my hotel.
If the customer check the prices also for that hotel, he'll find that they are the same as the room he booked. (I get them cheaper through the hotels I do business with and that's where profit comes from). But I'll never have the customer feel that he is getting less than he paid for, or have his holidays ruined or altered. 8/10 times he'll stay at a slightly cheaper hotel than mine but of similar or higher quality/star rating.
2/10 i'll go in the bank and i'll be putting the customer on a more expensive hotel than mine. Again its a stats game but I won't compromise on customer service and that's running a hotel. Also personally let me tell you that I am not very keen towards returning customers in my area. My experience has shown me that returning customers expect the hotel prices and offers to remain the same and the hotel is currently on a developing area which has its prices going up yearly.
I had returning customers asking why I was X more expensive this year than their last visit in 2016. For me its straight forward: inflation and the market prices around me will set the prices to where they need to be. For the customer is a bit more complicated and the customer will usually believe that my hotel is just becoming more expensive without a reason.
Again this thing on the returning customer is totally personal and it affects my area as its highly touristic and not a business area and my hotel being of a certain boutique size. I am aware that most hotels out there have loyalty programs and they do make their money of returning customers. Again as a hotelier I'll never ever compromise on quality and try to capitalize on someones holidays by ruining them or making them feel awful. If there is no room available at my price point around the area, the customer is going to stay at a more expensive room than mine and me going out of pocket on that. |
If you are having tourists as customers, they may be not much inconvenienced by having to move to a nearby (really near) other hotel, if you are working with business customers they won't likely ever return.
In both cases, by my personal standards (not necessarily valid universally) when someone books a room in a hotel he/she is entering in a contract where one side guarantees the availability of the (specific, meaning in the specific hotel/building) room and the other promises to pay for that room (or the cancellation rate) and overbooking and moving the customer to another hotel, no matter whether it is 4, 5 ot 6 stars is:
1) a breach of that unwritten contract
2) a lack of respect towards the customer
And the "stats game" is the usual (poor) excuse to justify a less than correct behaviour, worse - if you are doing that extensively and to tourists (possibly foreigners that are not familiar with the city or the local language) - you are actually leveraging on their inferior position and their lack of power/alternatives.