Overbooking Revenue Tool Calculator

Calculator Inputs

Currency prefix

Example: USD , PKR , €

Total sellable rooms

Max overbook rooms to test

Capped at 60% of rooms for realism.

Expected no-show rate (%)

Average daily rate (ADR)

Ancillary revenue per occupied room

Optional: parking, breakfast, resort fee, etc.

Variable cost per occupied room

Housekeeping, amenities, utilities, labor per stay.

Walk cost per walked booking

Relocation, transport, rate difference, compensation.

Reputation penalty per walk

Optional: goodwill loss, reviews impact, future discounting.

No-show fee collected per no-show

Set to 0 if you do not charge a fee.

Simulation runs (per level)

Higher runs = more stable output, slower compute.

Example Data Table

Hotel	Rooms	No-show %	ADR	Walk cost	No-show fee	Suggested overbook	Expected net
City Business	120	6.5	USD 145.00	USD 220.00	USD 40.00	11	USD 16,980.50
Airport Transit	90	9.0	USD 118.00	USD 180.00	USD 25.00	14	USD 10,540.80
Resort Weekend	200	4.2	USD 210.00	USD 320.00	USD 60.00	9	USD 35,420.10

Example outputs are illustrative and depend on your costs and demand.

Formula Used

The tool evaluates multiple overbook levels and selects the one with the highest expected net revenue. For each tested overbook value, it simulates many booking outcomes based on your no-show rate.

Bookings accepted = Rooms + Overbook
No-shows are simulated using a probability = No-show rate
Arrivals = Bookings accepted − No-shows
Occupied = min(Rooms, Arrivals)
Walked = max(0, Arrivals − Rooms)
Revenue = Occupied × (ADR + Ancillary) + No-shows × No-show fee
Costs = Occupied × Variable cost + Walked × (Walk cost + Reputation penalty)
Expected net = Expected(Revenue − Costs)

The recommended overbook rooms is the tested value with the highest expected net.

How to Use This Calculator

Enter total rooms available to sell for the date.
Provide your expected no-show rate for that segment.
Fill ADR, ancillary revenue, and variable cost per occupied room.
Enter walk cost and an optional reputation penalty per walk.
Add any no-show fee collected per no-show, if applicable.
Choose simulation runs, then press Calculate.
Review the recommended overbook rooms and scenario table.
Download CSV or PDF to share with your team.

Forecasting no-show behaviour

Daily no-show rates vary by channel, lead time, and season, and they rarely stay stable for long. This calculator converts your percentage estimate into many random booking outcomes, so you can see the spread behind a single average. Track separate benchmarks for corporate, OTA, direct, and groups, then refresh the rate each week using the last 30–60 days of arrivals, cancellations, and late check-in patterns.

Balancing ADR and ancillary yield

Overbooking works best when each occupied room delivers strong contribution after variable costs. Enter ADR plus ancillary revenue to reflect parking, breakfast, upgrades, minibar, or resort fees. The model applies ancillary only when a guest actually stays, protecting you from overstating revenue. If ancillaries are prepaid or non-refundable, shift that portion into the no-show fee input for cleaner economics.

Quantifying displacement and service recovery

Walking a guest can trigger cash payouts and brand damage beyond one diverted night. Include relocation rate differences, transport, meal vouchers, and staff time in walk cost. Add a reputation penalty to represent review impact, loyalty points, and future discounting. When these costs rise, the optimal overbook level typically falls quickly, even if your no-show rate looks attractive on paper.

Interpreting the scenario comparison table

The comparison table ranks overbook levels by expected net revenue, not by headline occupancy. Review expected walked bookings, expected occupied rooms, and expected arrivals together. A slightly lower net option may be preferable if it reduces walks materially and keeps front desk stress manageable. Increase simulation runs for tighter estimates, and use the same run count when comparing dates to keep noise consistent.

Using results in operations and policy

Treat the recommended overbook rooms as a decision support baseline, then apply business rules. Tighten caps for special events, severe weather, maintenance outages, or large VIP blocks. Combine the output with cutoff rules: stop selling when the walk risk exceeds your tolerance, require deposits for high-risk channels, or release inventory earlier when no-show fees are strong. Export CSV or PDF to share in revenue meetings and retain audit trails. Run sensitivity checks by changing no-show rate and walk costs to see how fragile the recommendation becomes during peak nights.

FAQs

1) What does “recommended overbook rooms” mean?

It is the tested overbook value that produces the highest expected net revenue after walk costs, reputation penalty, variable costs, and no-show fees across the simulation runs.

2) How should I choose the no-show rate?

Use recent history for the same day-of-week, segment, and channel mix. If data is limited, start conservative and adjust after reviewing actual arrivals versus bookings for several weeks.

3) Why include a reputation penalty?

Walking guests can reduce future demand through poorer reviews, service recovery offers, and loyalty compensation. A penalty lets you price that risk, even when the cash relocation cost looks small.

4) What if my hotel never charges no-show fees?

Set the no-show fee to zero. The model will then rely only on stayed revenue and will usually recommend fewer overbook rooms because no-shows no longer contribute revenue.

5) How many simulation runs should I use?

Higher runs reduce randomness in results. For quick checks, 1,000–2,000 runs work well; for high-stakes dates, increase to 5,000+ if page performance remains acceptable.

6) Can I use this for multiple-night stays?

This version models a single-night arrival scenario. For multi-night stays, use blended ADR and costs for the first night and treat walk cost as the total expected recovery cost for the stay.