Full Pattern Length of Stay: A New Old Leap in Revenue Management

By Don Wilson Senior Vice President, Maxim Revenue Management Solutions | October 28, 2012

Full pattern length of stay (FPLOS) controls for hotels can contribute 1.5% to 3.0% additional revenues over optimal rate management programs alone, without incurring additional costs for the hotel. Even Min-Max and CTA controls are inadequate to achieve the highest level of revenue management success and profitability for the hotel.

Several other industries have proven that there are a myriad of other factors that are crucial for revenue management success in addition to dynamic pricing.

FPLOS controls allow a hotel to accept a discount rate up to a peak period, say 1 and 2-night length of stay, not allowing stays at this discount rate for the peak, but then again open up this discount rate for longer lengths of stay, thus improving occupancy on the shoulder days and increasing overall revenues.

In addition, hotels incur incremental variable costs that cause a multiple-night reservation to generate more profits than single-night reservations at the same rate.

The results are a more accurate model of hotel operation and increased revenues and profits from the revenue management system using FPLOS.

But are length of stay controls really worth it? Optimal rate management should suffice, right?!

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Coming up in June 2019...

Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.