A hotel or airline accepts more reservations than it has physical rooms or seats, counting on some customers not to arrive. That practice is overbooking. It aims to maximize occupancy or load factor given expected no-shows.

When more guests or passengers appear than expected, staff must reaccommodate people—upgrading, transferring to another property, or offering compensation for denied boarding. Regulations in many places specify minimum compensation for involuntary denied boarding on airlines. Hotels handle overbooking through walk policies and alternative lodging arrangements.

Chronic overbooking damages reputation even if it is statistically profitable. Transparent communication and generous recovery gestures reduce anger when problems occur. Travelers with tight schedules or special needs feel the impact most sharply. The practice remains widespread because empty inventory cannot be sold once the night or flight has passed.

• Accepting more reservations than available capacity
• Based on predicted no-show rates
• Can lead to denied boarding or walked guests
• Managed through compensation and reaccommodation