Want to increase your hotel's revenue and keep your rooms filled for longer periods? Length of stay discounts could be your answer. These strategic pricing incentives can help you attract guests who want to stay for more nights.
So, how exactly do they work? Let’s start with what these discounts are and then showcase how you can use them to benefit your property.
A length of stay discount, also known as tiered pricing, is a strategy that incentivizes guests to book at your hotel for longer periods of time. Guests will get a reduced nightly rate for staying beyond a predetermined number of nights — typically starting at three or more.
This strategy not only entices guests to extend their visit but can also increase your ancillary revenue! Guests staying longer are also more likely to spend more on upgrades and add-ons, such as meals at the restaurant or services at the spa.
On the fence about this strategy? Length of stay discounts offer many benefits, from increasing revenue to simplifying inventory management.
When guests provide your hotel with a guaranteed booking, you can increase your revenue even when providing a discounted rate. Guests who stay longer are also more likely to purchase more onsite, whether it be from the lobby convenience store or your room service dining options.
When you offer guests better value for longer stays, they notice. You're giving them a chance to fully experience your property and services, which often translates into return visits. Plus, they'll have more time to engage with your staff and develop a connection to your property.
Extended stays make your operations more predictable and efficient. You'll know exactly how to staff your property, plan your housekeeping schedules and prepare rooms in advance. This advanced knowledge lets you optimize everything from staffing levels to inventory management.
Ready to put length of stay discounts into action? Here's a quick overview of how to create an effective strategy.
Before launching any discount program, you need clear objectives. Start by determining your ideal minimum stay length by looking at historical data periods where you could benefit from longer stays.
Then, set discount percentages that make sense for your market, desired occupancy levels and overall revenue. Factor in operating costs and local competition when setting these rates, too.
Different guests have different needs and booking patterns. Segment your audience to tailor your offers and improve guest satisfaction. For example, create specific packages for each segment, like a "Business Week Special" with discounted meeting room rentals or a "Family Escape Week" with family activities included.
Study your guest data to understand which segments are most likely to book longer stays and target them first.
Modern hotel technology makes implementing length of stay discounts much simpler and more effective. Here's what you need in your tech stack:
Success depends on careful monitoring and adjustment. Set up weekly reports to track key metrics like average length of stay, revenue per available room and total revenue per guest. Compare these numbers against your baseline data from before implementing discounts.
Pay special attention to ancillary revenue — are extended-stay guests spending more on food and beverage, spa services or other amenities? Use these insights to refine your discount tiers and targeting strategies.
A length of stay discount strategy (and advanced hotel technology) will help you increase function room occupancy, revenue and guest loyalty. To truly excel in hotel management, you'll also need a deep understanding of all the metrics that drive success. Learn more by reading 15 Important Hotel Metrics and How to Improve Them.
Everything you need to perfect the guest journey, boost revenue, and automate processes….
