Length-of-stay rules: when they make money and when they cost you

A length-of-stay rule makes money when the peak night is certain to fill anyway and the nights either side of it are weak, because it turns one-night guests on the peak night into two-night guests who also fill the quiet one. It costs you money when demand for that night arrives late, when the night is not going to fill, or when it leaves single empty nights nobody can book. Set minimum stays on the nights where the evidence says they will fill, and take them off as arrival approaches.

This post explains the rules, the method we use at our hotels to decide, and the arithmetic.

What kinds of length-of-stay rule are there?

Three come up most often. Our glossary entry on length of stay has the short definitions.

• Minimum stay. Bookings must be at least N nights. The usual one is two nights for stays that include a Saturday.
• Maximum stay. Bookings can be no longer than N nights. Rare for small hotels; useful when a long booking would block a peak night you could sell for more.
• Closed to arrival. Nobody can check in on that date, although guests already in house can stay through it. Useful on a peak Saturday, so guests must arrive on Friday and stay through it.

Why does this matter for a small hotel?

Because a small hotel’s busy nights are lumpy. In our example, a summer Saturday sells at £165 and fills weeks ahead; the Friday before sells at £130 and fills late, and the Sunday after often does not fill at all. If every Saturday room goes to a one-night guest, Friday and Sunday are left to fend for themselves.

A minimum stay is the simplest tool you have to move demand from a strong night to a weak one. It is also easy to leave switched on long after it stopped helping.

How do you decide whether to set one?

Work through this checklist for each peak night.

1. Is the peak night going to fill? Look at pickup against last year and what the hotels around you are doing. If you are not confident it will fill, do not restrict it.
2. Are the shoulder nights weak? If Friday and Sunday fill on their own, a minimum stay only turns away Saturday guests.
3. How far out are guests booking? If most bookings for that night arrive more than three weeks ahead, a rule set now has time to work. If they arrive in the last week, a rule turns away the guests you need. See lead time.
4. Where will you apply it? You can apply a rule to your own website only, to all channels, or to specific room types. Applying it to some channels only is common; keep the price itself the same everywhere.
5. When will you take it off? Decide now. A date written in the calendar, usually between 14 and 7 days out, prevents the most expensive mistake: a rule that blocks the last rooms.
6. What will you do about orphan nights? If a single empty night appears between two bookings, lift the rule for that night so someone can book it.

A worked example: a Saturday in late May

Our example hotel has 24 rooms on the Welsh coast. It sells around £110 a night midweek in autumn and £165 on a summer Saturday, runs at 68% across the year and takes about 40% of its bookings through online travel agents.

Six weeks before a Saturday in late May, the hotel has 15 rooms booked for Saturday, against 12 at the same point last year. Friday has six rooms booked at £130. Sunday has two at £105. Last year, the equivalent Saturday sold out eight days before arrival; Friday finished at 16 rooms and Sunday at 9.

Without a rule. The remaining nine Saturday rooms go to one-night guests at £165: £1,485. Friday and Sunday finish where they did last year.

With a two-night minimum for any stay including Saturday. Suppose six of the nine remaining Saturday guests book Friday and Saturday, and three book Saturday and Sunday. Saturday still earns £1,485. Friday gains six rooms it would otherwise have struggled to sell, and Sunday gains three. If, say, half of those would have come anyway, the rule adds three Friday rooms at £130 and two Sunday rooms at £105: £600 extra for one weekend.

The cost side. Two weeks out, Saturday has two rooms left and a guest emails asking for one night only. The hotel had written “lift the rule at 10 days” in the calendar. Rather than lose the booking, it lifts the minimum for the last two rooms. Had it kept the rule on and the two rooms gone unsold, it would have given back £330 of the £600.

Over a summer of a dozen such weekends, the rule is worth several thousand pounds, but only if it is lifted on time.

When do length-of-stay rules cost you?

• On nights that do not fill. A minimum stay on a Saturday that ends with three empty rooms has cost you three one-night bookings.
• On short-notice demand. Business travellers, walk-ins and late bookers rarely want two nights. A rule in the final week mostly turns them away.
• When they create orphan nights. One empty Sunday between two bookings, under a two-night minimum, is a room you cannot sell at any price.
• When they hide you from search. A guest searching one night on an agent’s site will not see a hotel that requires two. That is fine on a night you will fill; it is costly on one you will not.
• When they are forgotten. A rule set in March and still running in October is the most common mistake we see.

What should you do next?

Look at your next four weekends. For each, write down rooms booked against last year for Friday, Saturday and Sunday, then go through the checklist above. Our guide on how to price hotel rooms covers how this fits into a weekly routine, and our post on compression nights covers the nights where a minimum stay pays most. If you would rather see your pickup and the market around you for each night without the spreadsheet, you can start a 14-day RatePulse trial.

Then check whether any rule you set earlier in the year is still switched on, and whether it should be.