Pearson New International Edition International pcl tp indd 1

FRONT OFFICE SEMANTICS
Walk(ed):
Situation in which a guest with a reservation is relocated from the reserved hotel to another
hotel because no room is available at the reserved hotel. Used, as in, “We are three rooms oversold
tonight, if we don’t have some cancellations or no-shows, we will need to decide where we want to 
walk
those guests.”
Why do hotels overbook? Sometimes it is a mistake: for example, a guest reserva-
tion is made but mistakenly not recorded. Sometimes, however, an experienced revenue
manager wants to maximize occupancy and intentionally accepts more reservations
than it appears the hotel can accommodate. The revenue manager wants to fill the
hotel and anticipates that some of the guests with room reservations will be no-
shows. For example, a 100-room hotel with a 5 percent no-show rate may sell 101
rooms on a given night. Although technically overbooked, the hotel is not likely to
walk a guest, because the average number of no-shows (five rooms) will exceed the
size of the reservation oversell (one room).
No-shows are not unique to the hotel business. Restaurants, airlines, and rental
car agencies are just a few of the businesses that must manage their reservations
knowing that a certain percentage of those making reservations will not arrive to
claim their product or service. If a hotel’s total occupancy management plan is too
conservative (e.g., it does not factor in no-shows), rooms will likely go unsold, even
on “sold-out” nights. If it is too aggressive (e.g., it factors in an excessively large num-
ber of no-shows), too many guests with confirmed reservations will arrive at the
hotel. The occupancy management skills of the revenue manager allow the hotel to
sell the “right” number of total rooms during high demand periods.
Managing ADR
Most revenue managers understand that because of room rate economics (examined
earlier in this chapter), the best way to maximize ADR is to manage room rates in
conjunction with anticipated demand. When total demand is forecasted to be strong,
discounting room rates is not typically necessary to ensure the sale of rooms.
Similarly, when there is strong demand for a single room type, discounting that spe-
cific room type is not generally advisable, even if discounts will be offered on other,
less popular types of rooms. The ADR management goal of revenue managers should
be to achieve an ADR that is as close as possible to the hotel’s rack rate.