Hello everyone, welcome to the J'poster Complet . I hope everyone is doing well. Let me introduce myself: I'm Guillaume, management manager at J'annonce Complet . Today, I wanted to discuss with you a central subject in the management of many sectors, although less relevant for seasonal rentals due to certain limitations. This subject is overbooking or overbooking if you prefer the English. This involves managing overselling to essentially anticipate cancellations, but not only that. This can also be a strategy for filling categories.
Overbooking does not really apply to seasonal rentals. So I'm going to take an aside and give you some feedback, because I've worked in the hotel and cruise industries. What is overbooking? For example, a hotel, a boat or a building with ten rooms or apartments for sale, we sell eleven because we know that every month, we have cancellations. For cancellations, we can put conditions in place, but despite this, there may still be some. We cannot implement a policy that is too strict because competitors do not do so, and that would be detrimental.
We therefore anticipate cancellations via the history. This works best with large volumes. The greater the volumes, the more constant the average cancellations remain. Depending on the month of the year, the rate of last minute cancellations varies. We are talking about last minute cancellations here, because a cancellation three months before has no impact; we have time to resell.
Overbooking therefore consists of selling a little more than capacity, based on the average cancellation rate. It is of course necessary to monitor this rate in order to be able to react if necessary. In the hotel industry, if overbooking puts us in difficulty, we have what we call dislodging: we send the customer to another hotel. On a luxury cruise, we had cabins reserved for employees or service providers that we could release if necessary. If no solution was found, we refunded the customer. It cost money, but it was worth it, because out of a hundred overbookings per year, there were one or two with no expected cancellation, requiring a refund.
In short-term rentals, overbooking is difficult if you only have one apartment. Half of the reservations would have to cancel. For a hotel with one hundred rooms, two cancellations represent only 2% of reservations. The larger the volumes, the more relaxed we are about the number of cancellations. In short-term rental, if you have several apartments in the same location, such as five studios and five T2s, and the studios sell better, you can overbook by category. If you sell six studios, you can move the sixth client to a T2 in case of cancellation.
You can offer an upsell by offering the T2 at a reduced price. For example, if the studio is €50 and the T2 is €70, you can offer the T2 at €60, which rewards the customer and encourages their loyalty, while slightly increasing your income. You can also offer a free upgrade, which increases customer satisfaction at no loss to you, as the 2-bedroom would have been empty anyway.
So much for overbooking. I don't want to go into too much detail because there are many specificities depending on the sector, but it was a first presentation of this important lever in revenue management. I hope you enjoyed this little lesson. I wish you a great day and, as usual, don't hesitate to ask your questions in the comments.