Overbooking is a common practice used by airlines, hotels, and other service providers to maximize their revenue. It involves selling more reservations than the actual available capacity, anticipating that a certain percentage of customers will cancel or not show up. This strategy helps businesses fill their seats or rooms, especially during peak times. However, overbooking can lead to inconveniences for customers when more people show up than expected. In such cases, companies may offer compensation or alternative arrangements to those who are denied service. This practice is regulated in many industries to ensure fairness and transparency for consumers.