Only a third of global hotels offer a length of stay discount, and don’t expect higher than a 15% saving

If you think you will secure some discount for the length of stay in hotels then think again. New research from OTA Insight has found that just over one in three will apply a level of discounting in return for a guaranteed number of nights with almost three quarters of them requiring stays of ten or more nights.


Summary:

  • New research from OTA Insight has found that just over one in three hotels will apply a level of discounting in return for a guaranteed number of nights;
  • The newly released ‘Length of Stay Strategy Report’ examines the rates of over 50,000 hotels globally;
  • While length of stay discounts are available, most hotels that apply them will usually not apply one higher than 15%, according to the report.

The newly released ‘Length of Stay Strategy Report’, from the cloud-based data intelligence platform for the hospitality industry, examines the rates of over 50,000 hotels globally, based on data derived from the company’s Rate Insight platform.

The findings offer an insight into the number of hotels that apply a level of discounting in return for a guaranteed number of nights, how often they apply it, the size of discounts, and what key takeaways can be extracted from these different strategies.

OTA Insight compared three consecutive one-night prices at each property with the price for a length of stay of three nights, analysing by every room type separately, taking two-person, cheapest flexible rates. Of the 51,075 hotels with at least 30 future price dates advertised on the date the report was initiated, it was found 13,237 had length of stay discounts with at least ten dates with a discount for a longer length of stay.

In total 63% of hotels were found to almost never apply any kind of length of stay discount. Of the 37% that do, 71% discounted for ten or more days in the analysis period. Overall, the frequency of hotels applying different discounts varied, in some instances significantly, with discounts applied most consistently, by major chains, followed by 3- and 5-star hotels.

While length of stay discounts are available, most hotels that apply them will usually not apply one higher than 15%, according to the report. It also highlights that there is no fixed formula and while some hotel chains can be grouped together by similar average discount frequencies, the way hotels within each chain apply discounts can vary significantly.

The findings show that the majority of chain hotels with length of stay discounting strategies discount between 30% and 65% percent of the time and that differs significantly by region for the world. North America is the most frequent (36%), followed by the Middle East (29%), Asia (28%), Australia and New Zealand (21%), Europe (15%) and LATAM (12%).

Price adjustment is an inevitable reality for the day-to-day revenue management of most hotels, due to fluctuating supply and demand. But, Gino Engels, CCO at OTA Insight says that “adding length-of-stay discount tactics to their pricing and promotional toolbox is an effective method of driving up occupancy during periods of low demand.” He says it “should be a key consideration when planning out a pricing strategy.”

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