Below are four tips to obtain maximal vacation rental revenue from your property by ideal use of ‘length of stay’.
In my opinion, proper use of the length of stay controls during high-demand periods enables us to control customer demand, plan for the future and maximize vacation rental revenue.
1.Minimum Length of Stay
When to use
Minimum length of stay can be used at any vacation rental where there will be a period of high demand (a string of busy nights) followed by a period of low demand. Some example scenarios are: A vacation rental or a hotel near a winter holiday destination or any vacation rental in the vicinity of a major national festival or conference.
What to do
Implement a rule to accept longer-duration reservations and reject shorter-duration reservations for arrival during a hot period. That way we can fine-tune demand during hot times to increase occupancy during the slow period that follows.
Potential problems
We may not have anybody who wants to stay longer than the minimum you have in mind. Also, our guests may decide to leave early.
Requirements
We must be sure that we have sufficient demand for longer lengths of stay. Otherwise, use of this control could have a detrimental effect on RevPAR instead of improving it.
2.Maximum Length of Stay
When to use
This control is used when we are expecting to be able to sell out our properties at higher rates. Using the maximum length of stay, we can limit the number of rooms sold at large discounts during the high rate time period by limiting the (discounted) multi-night stays extending into that time period.
What to do
Do not accept reservations at specific discounted rates for multiple-night stays extending into the sold-out period. To do this, use the start of the sold-out period as a guide to determine the maximum length of stay allowable for discount customers. To accommodate guests who would like to stay at the hotel longer than the maximum length, it is possible to charge two rates: the discount rate for nights up to the maximum and the rack rate for subsequent nights.
Potential problems
Our guests may decide to stay longer. By law, we can’t force them out of their rooms.
Requirements
We must be sure we have high demand. Otherwise, you could decrease RevPAR instead of improving it.
3.Closed to Arrival
When to use
This control can be used to restrict arrivals during a time when we expect to reach maximum occupancy through guests staying on at the vacation rental for multiple nights (through “stayovers” as opposed to through new arrivals). Using this control would only make sense if we believed we would achieve higher occupancy by selecting a particular set of guests (i.e. those arriving before the closed-to-arrival date).
What to do
Do not accept reservations for arrivals on the day in question. Allow guests staying through from previous nights only.
Potential problems
We must be very, very careful with this control because using it will have an impact on the day we’ve closed to arrivals, and the day after, and the day after that. we may end up improving revenue on some days, but decreasing it on others.
Requirements
We must be sure we have extremely high demand.
4.Closed to Departure
When to use
This control can be used to restrict departure during a time when we expect to reach minimum occupancy through guests staying on at the vacation rental for multiple nights. Using this control would only make sense if we believed we would achieve higher occupancy by selecting a particular set of guests
What to do
Do not accept reservations for departure on the day in question. Allow guests staying through from previous nights only to extend their stay.
Potential problems
We must be very, very careful with this control because using it will have an impact on the day we’ve closed to arrivals, and the day after, and the day after that. We may end up improving revenue on some days, but decreasing it on others.
Requirements
We must be sure we have a low demand.
Along with LOS, we can also design ratePlans in such a way that we offer a different rate for Arrival/Departure/stayovers days. Also, we can provide a discount to the user based on the LOS or increase the cost if the user arrives in the weekend or during a festival season.
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