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 March 2019...

Human Resources: An Era of Transition

Traditionally, the human resource department administers five key areas within a hotel operation - compliance, compensation and benefits, organizational dynamics, selection and retention, and training and development. However, HR professionals are also presently involved in culture-building activities, as well as implementing new employee on-boarding practices and engagement initiatives. As a result, HR professionals have been elevated to senior leadership status, creating value and profit within their organization. Still, they continue to face some intractable issues, including a shrinking talent pool and the need to recruit top-notch employees who are empowered to provide outstanding customer service. In order to attract top-tier talent, one option is to take advantage of recruitment opportunities offered through colleges and universities, especially if they have a hospitality major. This pool of prospective employees is likely to be better educated and more enthusiastic than walk-in hires. Also, once hired, there could be additional training and development opportunities that stem from an association with a college or university. Continuing education courses, business conferences, seminars and online instruction - all can be a valuable source of employee development opportunities. In addition to meeting recruitment demands in the present, HR professionals must also be forward-thinking, anticipating the skills that will be needed in the future to meet guest expectations. One such skill that is becoming increasingly valued is “resilience”, the ability to “go with the flow” and not become overwhelmed by the disruptive influences  of change and reinvention. In an era of transition—new technologies, expanding markets, consolidation of brands and businesses, and modifications in people's values and lifestyles - the capacity to remain flexible, nimble and resilient is a valuable skill to possess. The March Hotel Business Review will examine some of the strategies that HR professionals are employing to ensure that their hotel operations continue to thrive.