How do airlines make any money when they offer you a hotel, dinner, next day first class tickets and sometimes cash/credit to give up your seat on an overbooked flight?

Anyone ever take the offer? What are your experiences? I've been tempted several times to take such an offer, but was hesitant.

I know a lot of people who have taken up the offer with American, and had good results. Sometimes they can get a voucher for a free ticket by simply taking the next flight within a couple of hours.

I, unforatunately, haven't been able to do it myself due to my schedule, but it's usually legit from what I understand.

It's a chance that the airlines take when they overbook flights and they have to make it up to the customers they bump.

If your schedule can handle it, I'd say go for it. I have never heard any negatives from the experience as long as it's with a reputable airline.

Last week, I actually got bumped from two flights. I had a confirmed seat on a Swissair flight from Zurich to Boston, which was overbooked. I was at the airport early enough and actually did have a boarding pass. When I got to the gate, I asked the agent if the flight was overbooked and asked what was being offered for compensation. I was rerouted through Chicago, and upgraded from a coach seat to business class, given $650 USD, and a voucher for a free airline ticket to anywhere the new airline, Swiss (Swissair filed bankruptcy and dissolved today) flies to from the US to Europe. When I arrived in Chicago, with my American Airlines voucher, I found out that flight was overbooked too, although I had a boarding pass and confirmed seat (I was connecting from Zurich). American Airlines offered me $300 in cash and told me that the next flight was an hour later. I accepted that offer too. However, my luggage did not make the flight from Zurich, and it arrived 2 days later and was delivered directly to my home. Some of the airlines have a policy regarding reimbursement for delayed luggage. I was given a form that I submitted for $600 (3 bags @$100 per day x 2 days). I am waiting for reimbursement. Overall, I am approximately $2600 ahead, excluding what the cost of a business class seat is. I arrived home 6 hours later. By the way, the airline ticket I purchased for this vacation was from Boston to Budapest via Zurich, and that roundtrip ticket cost me $400.

The best way to take advantage of this opportunity is to always arrive early at the airport and arrive early at the gate to speak to an agent. Ask what the airline is offering for compensation. Even if you inquire, you do not have to accept the offer. And sometimes the later it gets, the better the offer gets. I don't do it on my departures on vacation, as I usually have a prepaid hotel room that can't be cancelled (I usually travel to Europe), nor do I want to shorten my trip. However, I always arrive home one day before I return to work, so I have the cushion built in, in case I volunteer to get bumped.

We have done this many times-my husband and I joke that we haven't paid for a plane ticket for over 2 years. We have gotten "bumped" going to and from Tampa the last 3 years either at Xmas or Feb school vacation. Last year we had a total of 5000.00 in travel vouchers and this year 2750.00. It has gotten us to Hawaii 2 years in a row plus many other flights. If you can be flexible-it's a great deal. Sometimes we have had to stay overnight(usually but not always at their expense) but sometimes we just leave later that day.

I got the announcement for offers several times with American. I would volunteer, but since they couldn't usually get me to my destination very easily later (Naples, Fl) they usually would pass over me. But since I was at the top of the list, they'd often bump me to first class instead.

The best deal I ever got was two years ago on an AA flight SFO>DFW>LGW. The flight from DFW was full of three different high school groups and very overbooked. They couldn't really bump any of the teenagers and chaperones. So AA was pretty desperate.

AA offered $1500, hotel and meal vouchers and a seat guaranteed on the same flight the next day. As it turned out they got me on an earlier flight so I was only delayed about 1/2 a day and ended up in business class $1500 richer. Pretty good since I was on a consolidator coach ticket at $580.

My two traveling companions would go for the offer - but I jumped for it. We were going to be in London for a week prior to going on to Scotland. They had never been to London before but I get there a couple of times a year so I didn't mind giving up a day.

I meant to write that my friends would NOT go for it. But ther regretted it the whole trip - not that I rubbed it in about my $1500 windfall and Business class upgrade ;-)

I always volunteer to be bumped...if the terms aren't good, they won't force you to take it. If they are good, you win.
We used to plan for bumping on Hawaiian Air's LA to Honolulu flights after christmas, as they used to always overbook. We'd schedlue the 8 am flight and stay at a hotel right next to LAX the night before. In the morning, my husband would walk to the terminal and volunteer to be bumped. Usually we'd get $300 vouchers per person and first class seats on the noon flight for all four of us. Unless he called and told me to drop off the car and shuttle over, the kids and I would play at the pool until the noon flight. One time they bumped us on the noon flight and the 4pm one as well and we ended up with $3600 in vouchers, meal tickets, a hotel for the night, and first class the next day!
A year or so ago, they started flying direct to San Diego from Hawaii and those flights don't seem to be overbooked.

Did you think I'll have any luck getting bumped on a Las Vegas to Cincinnati Sunday afternoon Delta flight for two?
Also, may I select any hotel if forced to stay overnight...or does the airline direct you to a certain hotel?

Speaking from experience in the airline industry, Las Vegas is one of the places they oversell a lot of the flights because of "no-shows." Even if your flight is overbooked, in Vegas you will more than likely get on.
The airlines do get discounts from hotels around the airport, so they will usually give you an idea of where you can stay, or they may even call and make your hotel reservation for you.

Tom:

Yes, I agree with Mike. Anytime an airline puts you up for the night, or gives you a meal, it's usually at a property of their choice, not yours. Most airlines always make arrangements with the same properties, and therefore, get a discount.

When I've been put up at the airline's expense due to late flights, etc., they always direct me to the hotel and restaurant of their choice with a voucher in hand.

Just one thing to note if you're picky about where you sit on the plane. If you volunteer to be bumped and the gate agents determine at the end that they don't need your seat, you may not be able to get back the seat that you gave up. You may have to take whatever seats are left over. This happened to me once. I was still able to get an aisle seat, but not my original seat. I could have been stuck in the middle seat for the flight.

Just one thing to note if you're picky about where you sit on the plane. If you volunteer to be bumped and the gate agents determine at the end that they don't need your seat, you may not be able to get back the seat that you gave up. You may have to take whatever seats are left over. This happened to me once. I was still able to get an aisle seat, but not my original seat. I could have been stuck in the middle seat for the flight.

I personally had a great experience on US airways. Flight was overbooked and I asked if I could volunteer so I was booked on the next avaliable flight and upgraded to First Class. I was also given a voucher for 2 free roundtrip tickets anywhere in North America good for up to 2 years.

Jayelle-
that doesn't sound right - if you had a confirmed seat you keep it when you VOLUNTEER to be bumped you keep the seat (and board the plane, take that seat) until you actually ACCCEPT the offered compensation to surrender the seat.

to Not: yes, Janelle knows what she is talking about. I have volunteered to give up my seat well before boarding began. They actually start reassigning people into those seats that people are giving up. In the event that there end up being so many "no shows" that they don't need those seats after all, you may have lost your original seat. That is how and why I have been bumped to first class after volunteering, but then not being accepted as a person who they would fly later.

Not in this case. This was on Delta as I recall, going from Newark to Atlanta. When you volunteered to give up your seat, the gate agents took your boarding pass. At the end of the boarding process, when they determined that the flight was not going to check in full after all, they notified those of us who had volunteered (we were all still waiting in the gate area) and told us to take any open seat. It may not work this way with all airlines but that's how it was done in this case.

My post above was in reply to "Not." Sorry if that wasn't clear.

What about your luggage when you're bumped? I once got voluntarily bumped after I'd already checked my bag. The airline told me that they would hold it in their baggage office at the destination airport since it wouldn't get claimed at the carousel. When I got to the destination, no such thing. I searched around the baggage hall and found it sitting in a pile of bags in a corner, and anybody could have walked off with it. Since then, I've only volunteered for a bump when I've only had a carryon but I've always wondered if there's a way around this.

I guess you could wait until you know that you haven't been bumped and then do a gate check, but you often don't know about the bump until the very last minute, and I always think that gate-checking is just for those oversize bags that people are trying to pass off as carryons.

Here's a quick overview of the economic reality of an airline and why compensation isn't neccessarily expensive for them:

1 - All airlines overbook flights. The statistical probablity on "no-show" levels is built into the number of reservations that will be accepted for a flight. This allows them to maximize load levels by making more seats available for reservations than an aircraft actually holds.

2. Sometimes, more people show up than expected. However, that is offset by the number of times when the assumption is correct. IE, when someone is a no-show with a non-refundable ticket, the airline gets a fee for the change and has the benefit of collecting the cash well before the actual flight. A certain amount of those people will never use their ticket.

3. The cost of providing a volunteer with credit, is by far cheaper than the cost of compensation for a person who is denied boarding. When someone is denied boarding, they need to be guaranteed a seat on another departure within (2 hours, I believe)and the level of cash compensation they receive is much greater than the level of "credit" provided to a volunteer.

4. A certain number of people will use those vouchers for a trip they otherwise would not have taken. The reality is that seat would likely not have been sold anyway. Even if you are using credit, their is likely an incremental cost. Those additional, discretionary flighs increase the overall number of passengers and again, the passenger load levels on their planes. Also, a number of the people given compensation will never use the voucher.

The reality is that the cost of compensation is an expense that is part of doing business. That compensation is effectively "priced" into the cost of a ticket.