These are rarely needed when demand is high. But by offering guests a discount in return for a guaranteed number of nights, this strategy can help drive up occupancy during periods of low demand. As Matt Stephens, president at eHotelier, says of his time as a hotelier: “One of the regular challenges I experienced, which is shared by all general managers I speak to, is not what to do when business is strong, but how to effectively manage revenue during seasonal or economic downturns?” So the practice of LOS discounting will chime with him and many others reading this article. But just how common is it? And what else can we say about the way hotels discount by LOS? Starting with the leading global chains, we analysed the rates of over 50,000 hotels around the world for a global LOS report. To drill down into discount strategies applied, we compared three consecutive one-night prices with the price for a length of stay of three nights across a selection of hotels. From our Rate Insight data, we investigated: the proportion of hotels that apply some sort of LOS discount; how often they are applied; how high those discounts are; and what we know about the types of hotels that deploy this strategy. LOS discounting in ANZ: a short regional case study We also broke the data down further by world region. 1,801 of the properties we looked at are in Australia and New Zealand. The results from this, the first of the regional reports we published, were eye-opening. When you consider all of the investment in revenue management, pricing strategy and other technology that large hotels make, one of the most interesting and surprising findings is that 72% of this region’s properties in the study applied no LOS discounting whatsoever for the period in question.
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Monitoring and taking action on parity is where revenue and distribution management meet.
And of the 28% of the market we tracked that do offer LOS discounts, only 74% appear to have a properly defined strategy, as described in the report. That’s just 22% of the total hotel count for the region. That said, the importance of having a strategy for LOS discounts is underscored by the clear evidence that all 15 of these highly successful international chains that we analysed do have one, at least for some of their properties. Our regional report breaks down our other findings in ANZ, with highlights including: the spread of discounting frequencies; the spread of
Industry Journal - Revenue Management SEPTEMBER 2019