Today’s savvy hotel groups are always on the prowl for new ways to generate additional revenue, and the thriving extended stay accommodation division is making good on delivering exceptional value for its owners and guests. It has become so profitable over the years, in fact, that nearly every major global hotel franchise has at least one extended length accommodation product underneath their umbrella of brands.
When it comes to the marketing, operations and revenue management of extended length hotels, however, there are very distinct differences between their accommodations and traditional hotel rooms. In terms of physical layouts, extended length hotels and serviced apartments differ from many traditional hotel rooms since the majority of their rooms are equipped with full kitchenettes and an abundance of home-style amenities. The differences between extended accommodations and traditional hotels not only affect marketing strategies and operational processes, but they also impact how these properties are shaping the right revenue management practices for maximum revenue.
On the revenue management front, there are three critical areas where extended stay properties can use revenue management technology and the data it brings to take their revenue to new heights: business mix, inventory and pricing.
Better business mix
Better data brings better customer segmentation. For example, which individuals and groups are most desirable to the property and at what times of the year? Knowing the time period between December and March, as an example, is the slowest for group business allows an extended length property to adjust their mix (perhaps with a keen eye on individual travelers) for optimal revenue results. Or for companies negotiating new contracts, what is a reasonable rate if their employees will likely displace other prospective transient guests? Better data helps make better decisions – and it takes an advanced revenue management system to provide these answers and operating controls.
Strategic inventory allocation
Data becomes a true strategic asset when it improves forecasting, which is the fundamental basis for effective revenue optimization. The majority of today’s revenue management systems cannot properly forecast for long lengths of stay, while understanding the needs of short term transient guests; however, innovations in advanced revenue management systems are now able to tackle this challenge.
These data insights can inform more precise inventory allocation of unit types against the projected demand in a competitive environment. What rates and availability will prospective guests see? Is overbooking acceptable when demand is at its peak, knowing that certain guests are likely to cancel or cut their stays short?
Everything comes back to data. Optimizing revenue for extended stay properties goes well beyond hunches, guesswork and even learning from mistakes. The variables are extremely complex, the competitive threats are powerful and the opportunities are critically significant. Today’s innovative revenue management systems provide advanced and far-reaching solutions, making it time to harness the data at hand to fulfill the potential of extended stay properties.
Optimal pricing decisions
While traditional hotels with guests staying one or two nights face common pricing challenges, extended stay properties have to account for guests that stay a week, a month or longer to identify and offer the right rates. Adding an additional layer of complexity are pre-negotiated group rates and the reality that some guests will extend their reservations (e.g., a construction crew facing delays) and others will shorten them (e.g., a project team that completes its work early). Tracking historical patterns and observing real-time transactions means working with a revenue management system that offers granular details and sensitive controls to fine-tune operations. Today’s top revenue management systems help hospitality executives go miles further in optimizing their business mix.