overselling
Sign in to saveAlso known as overbooking, oversubscription, oversold flights
Overselling or overbooking is sale of a volatile good or service in excess of actual supply. Overselling is a common practice in the travel and hospitality sectors, in which it is expected that some people will cancel. The practice occurs as an intentional business strategy in which sellers expect that some buyers will not consume all of the resources they are entitled to, or that some buyers will cancel. The practice of overselling aims to ensure that 100% of available supply will be used, resulting in the maximum return on investment. If more customers than the seller expects do wish to purc
~16 min read
Article
17 sectionsContents
- Tourism industry
- Airlines
- Specific cases
- Involuntary deboarding
- Rail
- Hotels
- Manufacturing
- Aircraft manufacturers
- Telecommunications
- Telephone networks
- Communications access networks (last-mile)
- Internet
- Web hosting
- Solutions
- See also
- References
- External links
Overselling or overbooking is sale of a volatile good or service in excess of actual supply. Overselling is a common practice in the travel and hospitality sectors, in which it is expected that some people will cancel. The practice occurs as an intentional business strategy in which sellers expect that some buyers will not consume all of the resources they are entitled to, or that some buyers will cancel. The practice of overselling aims to ensure that 100% of available supply will be used, resulting in the maximum return on investment. If more customers than the seller expects do wish to purchase or use the sold commodity, it may leave some customers lacking a service they expected to receive.
Overbooking is regulated (though rarely prohibited) in many countries and industries, and companies that do practice it are often required or forced by market competition to offer large amounts of compensation to customers as an incentive for them to not take up their purchase.