Underreservation

Underreservation is the deliberate practice of reserving or allocating less capacity than what is available or what forecasted demand would suggest. In practice, it means keeping a portion of seats, tables, or tickets unbooked and available for walk-ins, last-minute changes, or contingency capacity. The term is used primarily in service operations such as hospitality, restaurants, theaters, and event venues, and is understood as the opposite of overbooking or overreservation.

Rationale includes protecting service quality and avoiding congestion, long waits, or strained staff workloads when demand is uncertain, or when forecast accuracy is limited. It can also accommodate unpredictable walk-in demand or special guests. Underreservation is often accompanied by explicit policy and dynamic adjustment based on historical data, seasonality, and real-time signals.

Implications: while underreservation reduces the risk of overcrowding and declines in service levels, it can lower utilization and revenue. The approach requires careful capacity planning and forecasting, balancing potential idle capacity against the costs of turn-away demand. Metrics include capacity utilization, walk-in conversion, and revenue per available seat/hour. It is commonly discussed alongside overbooking, yield management, and capacity planning.