‘Sorry, but the Hotel Is Overbooked’

It’s 11:30 p.m. You’ve just landed, an hour late, on your flight to Milwaukee. After picking up your bags you hail a cab and head for the hotel where you’ve made a reservation.

On the way in from the airport you’re entirely focused on one three-letter word: bed. But you’re in for a jarring bit of news.

“I’m sorry, sir,” the front desk clerk says without emotion, “but I’m afraid the hotel is overbooked.”

You protest, but there are no rooms. The clerk makes a few tired suggestions, and off you go, bags in hand, on a late-night search for a room. You finally find one an hour later.

And you make yourself a promise never to return to the hotel that refused to honor your reservation.

Some hotels still bounce travelers who hold bona fide reservations. Unfortunately, there is little that one can do about it.

In the airline business, passengers are protected from “bumping.” Thanks to an encounter Ralph Nader had with Allegheny Airlines a few years back (he was turned away from a flight for which he held a valid ticket and reservation because of an overbooking situation), if you have a confirmed reservation on a flight and are bumped, you are entitled to “denied boarding” compensation and, in most cases, free transportation to your destination.

In the hotel business it’s called “walking.” And when a hotel guest is “walked” it is, at the very least, an unpleasant situation.

‘Just Too Bad’

“The most miserable job I ever had was as a room clerk at the Hilton in Chicago,” says Larry Kirk, general manager of the downtown Hilton in Los Angeles. “The industry had no policy on walking a guest; if we didn’t have a room it was just too bad, whether you had a reservation or not.”

To be sure, things have changed for the better since Larry Kirk was “Dr. No” at the Chicago Hilton. One indication of Hilton’s policy shift when it comes to guaranteeing reservations is a recent restructuring at the parent company. The corporate head of front office operations now reports to the senior vice president of marketing.

While most hotels say they try to avoid the problem of overbooking, it still persists. Some hotels such as Hilton now have a clearly written systemwide policy on overbooking. When and if it happens, the hotel will pay for transportation to another hotel, pick up full room charges, and in some cases meals too.

At Westin Hotels there’s an advertised claim by the corporation’s chief executive, Harry Mullikan, that if for any reason Westin cannot find you a room for which you hold a reservation, they will find you a room at another hotel and pay for it themselves.

Managing Inventory

“In all seriousness,” Mullikan says, “I’m not impressed by my own pledge, because that’s not what the guest wants. If he wanted to be somewhere else, he’d be there. Our managers are professionals, and if they manage their room inventory properly, we will never have an overbooking situation, unless it’s caused by an act of God.”

There’s another, paramount reason why Mullikan does not look kindly on any of his managers who “walk” guests. “People sometimes forget how strongly an overbooking situation impacts a guest,” he says. “We’re not just talking inconvenience, but frustration and anger. I’d rather run at 92% than full. That way I’m not getting anyone mad at me for not keeping my reservation promises.”

To bring that point home, Mullikan tried a little experiment a few years back at a Westin top management meeting in Vancouver. He secretly set up a plan whereby 20 of his general managers arriving for the meetings were told that the hotel was overbooked and they couldn’t stay at their hotel. “And we actually walked these guys to other hotels,” Mullikan reports. “These GMs were mad, absolutely furious at the hotel.”

Low Relocation Rate

The next day, when Mullikan addressed the group, he let them in on his little secret. And ever since, Westin’s guest relocation rate has been very low. Not surprisingly, Westin hotel general managers are evaluated partly based on the number of guests they have walked.

“I don’t call it overbooking,” says Bob Wilhelm, managing director of the Westin St. Francis Hotel in San Francisco. “I prefer to call it a problem of under-departures.”

At the 1,200-room St. Francis, Wilhelm only walked three guests in May. “We’re in a very competitive market,” he says, “and we have a high no-show factor, sometimes as much as 50%. So we plan accordingly.”

Wilhelm knows, for example, that on a yearly basis an average of 350,000 people will stay at the St. Francis. Their average stay: 2 1/2 nights. There will be 400 to 500 arrivals and departures each day.

“We’re now more conscientious than ever about overbooking,” one Dallas hotel manager says. “And if we do have to bump somebody, we pay for it. We’ll transport them to another hotel, pick up their room tab and, in some cases, even handle their food and beverage costs. But we don’t do it that often. You don’t have to be a genius to project your room casualty rates.”

At the Beverly Hilton, general manager Dennis Clarke reports a 20% no-show factor. “That’s a large number,” he admits, “but we still run things conservatively, with a lot of empty rooms.”

“It’s a very touchy subject,” says Guenther Richter, general manager of the new Grand Bay Equitable Center Hotel in New York. “I’ve worked at hotels where the owners pressured management into a deliberate procedure to overbook. It was terrible. But any good hotel manager can avoid the problem entirely.”

Forewarned, Forearmed

So can a guest. If you know you’ll be arriving late, call and tell the hotel. In many cases they will ask you to guarantee your reservation with a credit card. (If you then don’t show up, don’t be surprised to find a charge for the room on your next credit card statement. If there are extenuating circumstances, you can still protest the charge, and many hoteliers won’t fight you if you do.)

“It’s definitely not a pleasant experience,” says Paul Limbert, general manager of the Park Hyatt in Washington, D.C.

But more often than not, a hotel knows a few hours ahead of time if there’s going to be an occupancy problem. What the Park Hyatt does is plan.

“If we think there will be an overbooking situation,” Limbert says, “we’ll start relocating guests who check in in the afternoon.”

The Hotel Treats

The hotel pays for a long-distance phone call, pays the guest’s cab fare to the alternate hotel and guarantees the guest a room at the Park Hyatt the next evening.

Then, when other guests arrive later in the evening, the hotel doesn’t have to relocate them. “There’s nothing worse than walking a guest late at night,” Limbert says. “This way we almost always avoid it.”