CD747

I was looking at hotels to stay at, and one hotel had no availability from Friday through Sunday, but did have availability if the check-out date was on Monday. Quite a few SPG hotels (and I guess others too) have similar availability rules.

I'm just wondering if our more commercially minded members could suggest the business reason is for a hotel arranging their availability in this way? I can see they wouldn't want to stop a guest staying Friday to Monday if Sunday night is a quiet night for them - but surely (at the very minimum) they would want to accept a guest staying Friday to Sunday, but paying an average room rate equal to a stay from Friday to Monday?

If I had to guess, I'd say there are upper limits to how much they can charge, so they are forced into playing with availability to maximise profit instead, but that seems kind of hard to believe and I'd be interested to know the actual reasons.

Thanks!

Johnny Rocket

Don't let the supposed availability put you off.

Clearly, if the hotel is available Friday to Monday, it is therefore by implication, available Friday to Sunday too.

Usually a quick call to the hotel or even the platinum concierge can easily chop off the extra nights at no cost or penalty to yourself.

mahasamatman

Clearly that's not true. Many hotels have minimum stay requirements. Sometimes you can get past them, sometimes you can't.

CD747

Gentlemen -- I have already read the threads about minimum stay requirements and whether or not they can be worked-around.

I'm specifically interested in the commercial aspects of why they exist in the first place, given the seeming illogicality.

Thanks!

boognish24

One theory: they may not have an issue filling up Fri / Sat nights with people who are beginning a stay prior to those nights, or extending a stay after those nights. If that scenario is plausible, then it makes sense to deal with customers who are going to stay longer.

I encounter this a lot with bookings, but my company's rate has a no early departure fee, which makes it easy to work around.

spgplat21

I think this has to be it.

I've also noticed that this type of minimum stay almost always disappears when that weekend arrives. I've been burned a couple times by waiting too long and having the hotel sell out, but more times than not they remove the minimum stay a day or two in advance and I make the booking then.

Pa Kettle

A scholarly viewpoint:

http://thehospitalityblog.ecornell.c...ength-of-stay/

CPRich

There's a conference that runs Friday through Sunday. I have X rooms and 5X people are descending on my city. But 70% plan to fly out Sunday.

Assuming an equal distribution and no restrictions, I'll be full Fri-Sun, but only 30% full Sun-Mon.

If I don't offer Fri-Sun, but offer Fri-Mon at a minor discount, I can attract the 30% of the attendees staying until Monday. That 30% still fills my hotel. All 3 nights.

So, I've gained 50-70% of a full night of revenue (depending on the discount, if any).

KosherKimchee

There is a whole discipline called yield management that cant be summarized in a reply. Same MLOS in rental car industry.

MSPeconomist

It's similar to the married segment logic that airlines use in determining availability for various fare buckets.

However, does anyone know whether the minimum stay requirements are property wide for all rate plans or can be imposed for disccounted or conference rates but not applied if someone is paying an unrestricted flexible rate or even rack rate?

Also, what happens if someone is willing to pay for Sunday night to get a reservation at a good rate but then leaves on Sunday? In particular, does the person get SPG points and especially night credit for Sunday night?

writerguyfl

As a former Revenue Manager, I'll highlight this before attempting to answer a few of the questions posed in this thread.

CPRich's exaplanation is the perfect explanation of what is happening. Scroll up to read it. But, essentially, the only reason a hotel will institute any stay controls is when they anticipate being fully booked. In this case, they don't want a Friday-Sunday stay because they (or really the computer) believes that they can fill that room by someone staying Friday-Monday (or possibly Saturday-Monday).

While the call might be quick, the decision override a stay control is not. A good Revenue Manager will not ignore stay controls just because a guest wants a room. While there are reasons for a hotel to do this, they won't be revenue-based.

Today's revenue management systems have the ability to place different stay controls on market segments, rate classes, or individual rates. Most of the time, this is done automatically by the software. Market segments are things like "rack", "corporate", "group", and "leisure". For example, in a typical downtown business hotel, all leisure rates would be blocked during the week.

Rate classes (a generic term that is different for each chain) are smaller categories within market segments. They are usually based on discounts. For example, a hotel might have several different locally-negotiated corporate rates. Those companies that produce more room nights will get a bigger discount. If a hotel will sell out, the rate classes with the highest discounts will be closed. (Although, the biggest companies negotiate for last-room availability. That makes things more complicated.)

Finally, individual rates can be controlled individually. This type of thing is what makes revenue management confusing to laypeople. In the old days when the telephone was the chief method of making reservations, the hotel would simply list the price for the dates of stay. Today, it's easy to alter those dates and see how rate and stay controls affect availability.

When you make a reservation, you enter into a contract based on your arrival/departure date. That contract is confirmed at check-in. Checking out early does violate the contract. Many hotels will avoid conflict and just let you leave. Some, however, will charge an early-departure fee.

It is up to the guest to navigate the ethical issues involved in purposely lying about your arrival/departure just to get what you want. (The choice to use the verb "lie" clearly illustrates how I feel about this practice.) Early departures can cost the hotel revenue. Additionally, they can potentially block other guests from booking at the hotel. Next time you can't get into your favorite hotel on a given night, it might be because another guest is holding a reservation for that night that they never intend on using.

Finally, there's no reason why a hotel would provide a night credit for a night that wasn't used due to early departure. You certainly wouldn't get points, as you didn't pay. Although, I would imagine that any early departure fee that was charged would generate points.

BobH

Did you take the time to see if there's a major event going on in whatever city you're going to.

Particularily true where I leave where 100k people is a considered a small crowd in the Big House.

Bob H

CD747

Thanks for the explanations

I guess the thing I don't get is, if the rate is:

Friday - $100
Saturday - $100
Sunday - $100

Why not simply offer Friday and Saturday only, at a rate of:

Friday - $150
Saturday - $150

Is it because the hotel then loses out on the parking fees, restaurant bills, laundry fees etc on the Sunday night? Or is there another revenue reason? (And again, if it is about losing out on Sunday's incidentals, can't they simply increase the Friday-Saturday rate even further to account for the average?)

Thanks! Some very interesting responses here!

MSPeconomist

I think you misunderstand my question. Suppose I really want to stay in a hotel for Friday and Saturday, at almost any price, but it's only available for Friday, Saturday, and Sunday. I make the reservation for three nights and plan to pay for all three nights, but I will actually leave on Sunday. If I leave late enough on Sunday and just don't tell the hotel, presumably I'll be charged for three nights and get three nights credit toward elite status as well as points for all three nights.

However, in this circumstance (where I'm not trying to avoid paying for the third night but I won't be able to physically sleep in the hotel for the third night--and I prefer to pay for the night rather than pay an early check out fee or maybe the room is prepaid), what happens if I tell the hotel when I leave and ask for a copy of my bill at that time? What if I leave early enough that hoousekeeping reports the room as unoccupied for Sunday night? OTOH, given that most hotels charge late checkouts after 6 pm for a full additional night, if I leave after 6 pm and therefore must pay for Sunday night according to hotel policy, do I earn the night credit and points for my Sunday night room rate?

In these cases, I booked the hotel for Sunday night, I paid for Sunday night, and I was physically present in the hotel as I stayed there for Friday and Saturday nights. I don't see any ethics issues. In fact, to me this looks similar to reserving and paying for a room for the night before a very early morning arrival to guarantee room availability upon arrival.

CPRich

Because you're in a market with other hotels. If the going rate was $150, you'd be charging $150 for all 3 nights. If the market clearing price (driven by supply and demand fundamentals) is $100, then raising it to $150 means you will have fewer guests. 100 guests for 2 nights at $150 is much worse than 500 guests for 3 nights at $100.

Unless you're a monoploy, you can't just set any rate you want.