How do you define bookings?

What Do You Understand By This Term Bookings?

Bookings is an industry term in the travel, hospitality, and event management sectors and means the reservation or appointment to receive a particular service. Nevertheless, it is possible to define what a booking may include in a quite detailed manner, although such specifications may differ from one business or industry sector to another. The following are brief descriptions of some of the important factors that go into establishing bookings.

What Gets Booked

Customer services encompass but are not limited to hotel rooms, restaurant tables, airline seats, venue rentals for events, spa appointments, tours, cruises, tickets for entertainment events, and meeting rooms are some of the service types that are commonly prearranged at different facilities. A booking guarantees the customer a space to use the inventory or service at the agreed date, time, and price and thus a form of payment.

Time Component

Bookings refer to the prior act of putting in a request for some inventory or an appointment before a service or appointment occurs. Most of them are prepared at least several days or weeks before the specific time needed, but some of them can be booked the same day, for example, a restaurant table. The only important thing is that these activities happen before the related service. Even if the customer pays after the service, if they did not book in advance to seek a hair salon’s services and got served, then it does not mean that it was a booked appointment. However, any appointment made for the next week or any other desired hairstylist is considered booking.

Financial Commitment

In most cases, a booking also reflects an amount receivable from the customer for products or services to be delivered by a business. In the process of organizing a hotel or event, the business will ask the client to provide a credit card number or pay some deposit for the reservation and if they are not going to show up or cancel the booking then they are charged the cancelation/no show fee. While, for such business types as restaurants there may be no initial deposit, other fees like a default or no-show charge are possible depending on the chosen policy. In any case, the fulfillment of a certain minimum financial risk is typically assumed in classifying a reservation request as an official booking.

Channel of Transaction

Reservations are generally made either directly or indirectly online, and these are connected with inventory control. Business concerns come up with new booking reference numbers or identifiers to associate with individual transactions. But the booking can be made through the phone, personally, by a third party, through email, or even by filling out a booking request form. Thus, provided that there is a confirmation of availability, a record is created formally holding a place for the customer, and there are terms/cancellation policies in place, the classification is not altered by the communication channel used to make the booking.

Relationship to Revenue

One of the main reasons is that bookings are considered as one of the key business indicators that should be monitored more closely and they are directly connected with expected revenues. The amount of bookings either in count or in dollar terms that a company has in its pipeline over a certain period gives a measure of business on the books that is expected to convert into revenue. This is likely to be offset by the net revenue that may have been impacted by cancellations or no-shows, but booking velocity and volume are vital to revenue forecasting.

Bookings Funnel Terminology

Here are some other common terms used when analyzing the bookings process: 

• Bookings inquiry: When a potential buyer wishes to know if the venue is available and the rate in advance but does not necessarily book it.
• Tentative booking: A reservation where the customer exhibited that a particular booking has a higher probability of cancellation or change than usual. Further variation between terms may be available when it comes to changes in timing or cancellation policies.
• Definite/confirmed booking: A confirmed reservation in which the customer accepts the status of the booking, availability has been checked and confirmed, details of the rental have been agreed upon, and the policies regarding changes and cancellations are also accepted by the customer.
• Waitlist booking: When there is no such availability, some organizations open a list where a client can request a booking. This is translated to a confirmed booking in case of a new inventory availability. This means that customers are informed of their turn on the waiting list based on the time they made the list.
• Overbooking: One of the dangerous trends of doing business is to book more rooms than are available on a given day, hoping to have some no-shows or cancellations to accommodate the overbooked number. This can backfire if there are more guests than planned or anticipated by the host.
• Booking engine: This is the customer interface or the website and software portal where customers go to view availability in real-time and also make secure bookings online. It is integrated with backend inventory, revenue, and channel management systems on one hand.

Key Metrics and Reports

In the travel and hospitality verticals especially, some key performance indicators (KPIs) related to bookings that businesses analyze: 

• Booking volume: The overall number of reservations made throughout a specific period in terms of per day, per week, per month, or year.
• Booking or reservation value: Add up all the expected revenue values originating from bookings.
• Average Daily Rate (ADR): Computed by dividing the sum of cash received for all rooms/events by the total count of rooms/slots sold for the same period. Helps benchmark pricing.
• Booking lead time: Usually, bookings are taking place days or weeks in advance most of the time. If it is too short, then it appears that there are customer acquisition problems in the business.
• Channel mix: Compares total bookings by the channel, such as business website bookings against OTA, and others.
• Conversion rates: Proportion of people who access the website or express interest through other means that proceed to book a room. This assists in sales funnel assessment.

By regularly analyzing bookings’ performance it is possible to detect ways to enhance customer conversion, accustom new sources of income, and maintain occupancy and capacity rates. The analysts will be able to generate the desired reports which leaders can use to attain these goals when there is a standard internal procedure of differentiating and capturing bookings.

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