Hotel Revenue Glossary · Operations

Guaranteed Reservation

A reservation secured by an accepted guarantee method, such as a payment card, deposit, or prepayment, under stated cancellation and no-show terms. The hotel normally holds the room according to those terms; collectability is not assured.

Why it matters: A guarantee can give the hotel a contractual basis to apply a no-show charge and may affect arrival behaviour, but realised revenue and no-show probability depend on payment validity, policy enforcement, segment, channel, and property history. Use observed cohorts rather than treating guaranteed bookings as forecast-certain.

Worked example: Pull last winter's Thursday arrivals. Of 612 guaranteed reservations, 19 never arrived — 3.1%. Six of those cards declined, so you billed 13 at an average A$186: A$2,418 recovered against A$3,534 of room nights lost (19 x A$186), a 68% recovery. Those two figures, 3.1% and 68%, are what belongs in your overbooking model. A held card is a claim on revenue, not the revenue itself.

Common mistake: Forecasting guaranteed arrivals at 100% because the terms say the room is held. The terms describe your right to charge, not the guest's behaviour, and a card valid at booking can be cancelled, expired or disputed by arrival. Forecast off your own observed no-show rate by segment and lead time.

All glossary terms No-Show Rate Non-Guaranteed Reservation Cancellation Rate