Oversold on a Friday: reallocating 96 confirmed arrivals against 92 usable rooms
At 2 pm on a Friday, the 96-room Hotel Surya is holding 96 confirmed arrivals for the night. Four rooms on the third floor have been out of order since Wednesday after a chiller failure, and engineering now says they cannot be restored before Monday. Front office records for the last eight Fridays show an average of 2.9 no-shows. A travel agent holds a 12-room allotment with a 6 pm release; only 7 of those rooms are picked up, and the agent has not answered two calls today. Three reservations are competing for any room that frees up: Guest A, a solo traveller on a free-cancellation OTA booking of ₹4,200 for one night, arriving at 2 pm; Guest B, a family of four on a prepaid non-refundable booking of ₹6,800 arriving at 11:30 pm; and Guest C, a Gold-tier corporate account paying ₹6,500 a night for three nights, arriving at 5 pm. The partner hotel two kilometres away will take a walked guest at ₹5,500 plus ₹600 for transfers.
1. Working from the numbers given, how many rooms is the hotel actually short of at 2 pm, and what should be done before anyone is walked?
Read the worked answer
Physical position: 96 rooms − 4 out of order = 92 sellable. Confirmed arrivals = 96, so the hotel is oversold by 4 rooms on paper.
Do not walk anyone yet. Reduce the exposure first, in this order:
- Reclaim the agent allotment. Only 7 of 12 rooms are picked up, so 5 rooms are unsold and held until 6 pm. Ask for early release in writing before 3 pm - that takes sellable inventory from 92 to 97.
- Re-test the no-show assumption. 2.9 is an average over eight Fridays and a wedding weekend distorts it; plan on 2, not 3, and never walk a guest on a forecast alone.
- Get a written engineering status at 4 pm. A chiller issue often restores one or two rooms; treat OOO rooms as lost only when engineering says so.
Net position after release: 97 rooms against 96 arrivals, less ~2 no-shows → no shortfall, one room of cushion. A walk list is held only if the agent refuses release. The arithmetic must be finished before the guest list is opened, because the cheapest room is the one you never had to walk.
2. If a one-room shortfall still exists at 4 pm, which of Guests A, B or C do you walk? Justify with revenue at risk and service logic.
Read the worked answer
Cost of walking any single guest = partner hotel ₹5,500 + transfer ₹600 = ₹6,100, plus the room revenue forgone.
- Guest A: ₹4,200 for one night, flexible booking, arrives 2 pm. Net cost ≈ 6,100 − 4,200 = ₹1,900. No refund dispute, relocation happens in daylight, guest is not stranded at midnight.
- Guest B: ₹6,800 prepaid non-refundable, family of four, arrives 11:30 pm. Walking them means refunding against your own terms (a policy exception), paying ₹6,100, and relocating two children after 11 pm - the highest complaint and review risk of the three. Net exposure ≈ ₹12,900.
- Guest C: ₹6,500 × 3 nights = ₹19,500, Gold tier, corporate account. Net exposure ≈ ₹25,600 plus the account relationship.
Walk Guest A. Lowest total revenue, shortest stay, earliest arrival, and a cancellation-flexible booking so there is no refund argument. The other two carry far more money and far more service risk. Walking is a revenue-protection tool, not a first-come-first-served queue.
3. Set out the walk protocol: what the guest is told, what the hotel pays, and what is logged.
Read the worked answer
Before arrival, not at the desk. Telephone Guest A at 3 pm, apologise plainly, explain the room shortfall without blaming the OTA, and offer the alternative before the guest has travelled.
What the hotel pays for:
- Room and taxes at the partner hotel (₹5,500), of equal or better standard.
- Round-trip transfer (₹600) and a phone call to the hotel.
- Breakfast if it was part of the original rate.
- A written voucher for a priority upgrade on the next stay - a cost-free gesture, not another cash discount.
Procedure: offer to hold luggage at Hotel Surya and transfer it; obtain the guest's signed acceptance; confirm everything by email or SMS with the partner hotel's address, booking reference and the name of the person meeting them; call the partner hotel on arrival to confirm check-in went smoothly.
Logging: record the walk in the PMS with reason code, authorising manager, monetary cost (₹1,900) and a guest-satisfaction follow-up date. Charge it to guest relocation, not to discounts, so the figure stays visible. Debrief on Monday: one walk is tolerable, a second one on this account justifies cutting the OTA allocation by four rooms next Friday.