Overbooking

Overbooking occurs when a service provider, such as an airline or hotel, accepts more reservations than there are available seats or rooms. This practice is based on the expectation that some customers will cancel or not show up, allowing everyone to be accommodated. However, if more guests do arrive than expected, it can result in some customers being unable to receive their booked service, leading to inconvenience or the need for reallocation. Overbooking helps maximize revenue but requires careful management to balance customer satisfaction and operational efficiency.