Want To Increase The Average Length Of Stay? - Let Us Help You!
“What does average length of stay even means?” You must be thinking to yourself after reading the title. In the hospitality industry, there are various terms that one may not know at the moment. However, you will need to be familiarized with the terms ASAP. Before we discuss how to increase the average length of hotels, one needs to understand what the word means.
What is The Average Length Of Stay
Let us understand what is the length of stay first. It refers to the number of nights the guest stays at a hotel. It can range from one day to more than a week. However, what is more, important for us is the Average Length Of Stay.
Average Length Of Stay is the average stay duration of the guests in a hotel. They can be calculated on a weekly, monthly, quarterly and annual basis.
The formula for the average length of stay or ALOS is:
Total Number Of Room Nights booked/Total Number of Bookings
One resort had 3 bookings last week. The stay duration of these 3 bookings were 4, 6 and 8. There the ALOS will be:
(4 + 6 + 8)/3
This way, you can easily calculate the ALOS for all the hotels for various periods.
Importance Of Average Length Of Stay
The Average Length of stay is a major determinant of the hotel's revenue. Hotels strive to increase their average length of stay for the following reasons.
It Is Cost-Effecient: Hoteliers have a much easier time gaining revenue from 2 nights from one booking, than getting the same revenue from 2 bookings. A higher ALOS gives a better return per guest and is also more convenient from a marketing and business point of view.
Upselling And Cross-Selling Opportunities: An increase in the Average Length Of Stay for hotels ensures better upselling and cross-selling opportunities for hotels. The longer the guest stays, the longer he or she, has the time to explore the other amenities of your hotel. Don’t let this opportunity slide.
Better Targeting: With a higher ALOS, you can target some guest personas and segments better. For example, those who want relaxation and wellness tourists will want to stay at the property for more than a single day (considering that they have spent time travelling to the hotel as well).
Better Guest Experience: The guests have more time to relax at your hotel, and also more time to explore the property. This way, you will be able to provide a better experience to the guests. The guests can also avail of a longer stay at a reasonable price.
Can Hotels Increase The Average Length Of Stay? Yes!
We will also show you how you can do it. There are some things you should keep in mind before you formulate the strategy of increasing the Average Length Of Stay at your hotel. You should first analyse the revenue-earning opportunity of increasing the length of stay.
One should also understand that there are various ways by which one can increase the ALOS. The first is at the time of booking. For example, you can run promotions and offers that encourage the guests to book longer stays. Second, you can also promote extended stays when the guest is at the property.
Strategies To Increase Average Length Of Stay In Hotels
Let us now get to the part we all have been waiting for - how to increase the average length of stay in hotels. With these strategies, you will able to achieve the ALOS that will provide with you maximum hotel revenue and ROI.
1. Know Your Target Audience
The first thing you need to do is - UNDERSTAND YOUR TARGET AUDIENCE! Yes, we have repeated this point multiple times, on multiple blogs. However, this is the one thing many hoteliers ignore.
Even though various types of guests visit your property, there are 1 - 3 guest personas that figure in your booking list prominently. Identify them and then market the property efficiently. This strategy can be used to increase the ALOS of hotels as well.
For example, You own a resort with a swimming pool, poolside bar, and various activities. You can promote your property as a retreat by offering great deals if the guest books for more than 1 night, ideally 2 - 4 nights.
2. Set Minimum Booking Restrictions (Be Careful Though)
This is one of the most overlooked but efficient ALOS strategies for hotels. Minimum booking night refers to the minimum number of nights the guests need to book a property. The guest can’t book for a lesser duration.
However, you need to be careful when you implement this strategy. If you are a business hotel, or a hotel that is that a location that has limited sightseeing opportunities (and no nearby day trip site as well), then the guest will not book a longer stay no matter what. This strategy works best with serviced apartments and holiday villas.
3. Effective Pricing Strategies
There are two forces in play. One is the hotelier that wants higher revenue from the increase in the average length of stay. The other is the guest, that wants a better deal after booking a longer stay duration.
As a hotelier, your aim is to manage these forces to come up with the best pricing strategy. It should provide you with higher revenue, but also should be easy on the customer's pockets. The goal is to increase your revenue and increase sales at the same time.
4. Promote The Best Packages For ALOS
One of the best ways to increase the Average Length Of Stay for hotels is to promote packages for 2+ nights booking durations. You need to keep hotel revenue in mind when you formulate these packages.
There are three types of packages:
Fixed Packages: These packages have predefined services, meal plans and prices. These packages are open to everyone. The guest can’t change it.
Customized Packages: These packages are gaining in popularity. Here, the customers are allowed to change and modify the offerings and prices as well, based on what they have chosen.
Personalized Packages: These packages are specifically created for certain guests, based on the booking history. It is also offered to guests with a personal equation with the hotelier.
5. Corporate Bookings - Make The Most Of It
Every hotel looks corporate bookings, and rightfully so. A guaranteed stream of guests throughout the year, at the cost of some discounts. This is among the best trade-off for hotels. Corporate bookings include corporate events, such as exhibitions and team events, and also employees and management booking hotels for work-related purposes.
When corporates come for work-related purposes, they often stay for more than a day. There are also times when remote employees have to go to the office for some work. If they stay far, they will need to book a hotel.
This way, corporate bookings offer a great opportunity to increase the average length of stay (ALOS) for hotels.
6. Promote Nearby Events
Suppose your hotel is in Vagator Beach Goa, and there is a Sunburn festival happening. You can promote these events by trying up with them. You can get passes from the organizers and then promote these events by selling these passes at a discount, along with the room rates.
This way, you can promote nearby events in your hotels and increase your average length of stay as well.
7. Offer Deals During Guest Stay
Marketing does not stop after the booking is done. It is a continuous process. You can promote various deals like - “Extend your stay and get 30% off on an additional day”. This way, the guest will have to opportunity to avail of the best deals, and you will also get some additional revenue for the guests.
By following these strategies, you will be able to increase the Average Length Of Stay in hotels and also gain hotel revenue. Read our blogs to know more about the hospitality industry.