As a hotel owner, it is always helpful to collect as much data about your customers as possible. This information can benefit your business model in many ways. For instance, calculating the average length of stay of your guests is always something you should endeavor to do.
In the following article, we will talk about average length of stay. We’ll cover what it is, the formula for calculating it, and we’ll also talk about some ways you can potentially extend it if it’s not currently to your liking.
Average length of stay, sometimes abbreviated as ALOS, means the average number of nights that a guest stays at your property over a given time. You can figure out the average length of stay for your hotel for virtually any period. Then, you can decide what actions to take based on that information.
Let’s say that your average length of stay was 3.5 for the year’s second quarter. Breaking ALOS down by quarters is relatively common in the hotel industry. In that example, each guest booking during this quarter was three-and-a-half days, on average.
You should know that the average length of stay for guests in your hotel will usually fluctuate depending on several factors. Often, you will notice that ALOS will increase during certain times of the year. The season often has something to do with it, as well as travel patterns associated with your locale.
Other factors that often influence ALOS might include your target market, location, and property type. If you are running a resort that mostly targets a leisure crowd, for instance, you can usually expect a longer length of stay from your guests. If you’re mostly targeting individuals who are traveling for business, and you’re in the middle of a busy city, having a less lengthy ALOS is to be expected.
It’s interesting to note that the healthcare industry uses these stats as well. A hospital might use ALOS, for instance. In those cases, the facilities are usually looking for shorter stays rather than longer ones.
There are many reasons why increasing your ALOS will help your hotel to be more successful and profitable. We’ll mention just a couple of the more vital ones right now, though.
For one thing, if you can increase your ALOS, that will allow you to see reduced turnover costs. Guest turnover refers to when a current guest checks out and a new one checks in. If you consider it, you can see how there will always be turnover costs associated with the process when a guest checks out.
You need to pay your staff to have that room serviced and cleaned. They will need to strip the beds, wash the linens, and put new ones on. They must throw away any trash that the previous guests left in the room. They must provide the new guest with fresh towels and toiletries.
There are also frequently administrative costs associated with guests checking in and out. It’s true that you can automate much of what happens when a guest checks in or out these days through advanced, interactive software programs. However, it’s not something that you can do entirely free of human help.
There is also ancillary revenue to think about when you increase your ALOS. Imagine a scenario where you have successfully lobbied for a guest to stay in one of your rooms for an extra night or two. Maybe you sent them an email that told them they could enjoy the amenities at your spa on the premises if they stayed for another night. That sounded appealing to them, so they agreed.
When you do this, you get the additional revenue from the guest staying in your room for a longer time, but you can also count on them spending more money in your hotel. Maybe they will go down to the hotel bar and get a bottle of champagne that night. Perhaps they’ll spring for a lavish dinner at your high-end restaurant on the premises. They are just as likely to avail themselves of any other services you offer in or around the hotel.
That money adds up quickly. It’s another hidden dividend that you might potentially enjoy if you can just convince one of your guests to stay with you a little longer.
In 2019, the average hotel guest length of stay in the US was about 1.9 nights. Over 64% of guests during that time stayed at a hotel for only a single night. 2022 saw an uptick in this number, with the total nights going up to 2.1. The majority of single-night guest stays remained almost the same, though, averaging about 62%. Longer stays by leisure travelers during that year may have contributed to the slight increase in ALOS.
As for Europe, you might use Spain as an example. In 2022, the average number of nights booked by individuals was 3.11. However, this number encompasses both hotels and hostels.
As a hotel owner, it’s up to you to not only determine ALOS for your guests, but also to decide what to do with that information once you gather it.
At this point, it should benefit you to know how to calculate the average length of stay for your guests. Equipped with this information, you can decide how to plan or modify your next ad campaign.
You start by adding up the number of room nights that guests booked for a particular period of time. That could be a week, month, quarter, year, etc. You will then add up the total number of reservations for that same period. You’ll then divide the number of room nights by the total number of reservations. This will give you your average length of stay for that time.
Let’s say you have a hotel with 40 total rooms available. Your maximum capacity of room nights for your hotel is 1,200 for a single month. Over one month, there are 875 room nights booked. They are split among 438 bookings.
875 / 438 equals 1.997. In other words, your average length of stay for the month in question is just under two, or slightly less than two nights per customer.
We’ve alluded to average length of stay being important, but before we get into some ways you can potentially increase your hotel’s ALOS, we should explain in greater detail why this metric matters. ALOS shows you guest booking patterns. You can look at these and see how guests are booking with you over the course of seasons and events that might happen close to your hotel.
This should allow you to price your rooms in ways that make sense according to how in demand they are at certain times of the year or when particular events are going on. It stands to reason that if there’s a festival happening close to your hotel, for instance, then you will want to increase room prices while that is going on. You can also incentivize guests staying in your rooms longer during times of the year when business traditionally slows.
You can also run your business more efficiently if you have a handle on ALOS.
Now, let’s discuss some ways you might increase your ALOS if you find that the numbers are not where you’d like them to be.
Remote work is becoming more prevalent with every passing year. If you can cater to flexible employees, it makes sense to do so. You might offer packages that include things like a laundry allowance, food and beverage credits, comfortable desk space in a common area, and super fast Wi-Fi.
These are all things that a remote worker might look for. If they see that your hotel offers all of them, they’re likely to stay with you longer when they’re on the road, and they will likely come back again. They will also probably pass on word of your excellent services to their friends.
Once you have some guests in-house, coming up with ways for them to extend their stay makes sense. If you can lock them into an extra day or two, that is always to your benefit.
Reach out to them in an unobtrusive fashion after they have checked in. You don’t need to do so in person. Sending them a text message or email could work. If they extend their stay, you might offer them a 10% discount on each additional night. Maybe a free dinner at your restaurant would entice them instead.
By sending an email or text message rather than letting guests know about this perk in person, you’re not putting them on the spot. They are much more inclined to consent to staying for another day or two if you give them a little time to think it over in an unpressured way.
Digital communication is also ideal because you can include a link guests can use to extend their stay with just a couple of taps of a button. They can easily see the conditions laid out on their laptop or smartphone screen.
This convenience factor could very well end up being the difference between whether they extend their stay or pass on the offer. Offering simplicity via technology is frequently to your benefit if you’re trying to get a customer to purchase something impulsively.
Once you have a guest in your hotel, making things as nice as possible for them can only help your chances of getting them to stay longer. Leave literature in your rooms that describes the spa experience a guest can have in your hotel. You might offer transportation or partner with local businesses that offer day trips to scenic spots nearby.
Try to showcase a variety of options. The more types of guests you can appeal to with what you have on offer in and around the hotel, the more likely you’re going to be able to convince someone to stick around for another day or two.
Consumers always want to feel like they are getting a good deal on something. It makes it easier for them to come to terms with spending money. That’s why sales have always been successful, easy promotional events.
Offer length of stay pricing that’s attractive to a guest. Offer a package that lets guests stay with you for four nights for the cost of three, or seven nights for the cost of six.
This is an especially useful strategy if you’re trying to lock in a guest for a longer stay during the slower times of the year. Once you have that guest in your hotel, gently trying to persuade them to extend their stay is paramount.
At certain times of the year, you might want to at least consider implementing a minimum length of stay (MinLOS) for guests. This is a foolproof way to increase ALOS because you’re not allowing shorter bookings, such as one or two-night stays.
Of course, the flip side of this strategy is that you’ll miss out on any guests who are only able to stay with you for one or two nights. During a traditionally slow time of the year, you’ll want to avoid this strategy. You should only implement it during a time of year when you know your rooms are highly in demand.
When there’s a big trade show going on nearby or during a holiday weekend in the height of the summer would be the perfect time to have minimum length of stay room bookings in effect. There is a certain amount of inherent risk involved. However, if you can project what demand will be like based on data you’ve collected during previous years, you will somewhat mitigate the risk of losing out on potential customers.
If you try some of the techniques we’ve mentioned, it’s highly likely you can increase the average length of stay for your hotel guests. There are a few additional points to keep in mind, though.
Flexibility is key. You should not work out some techniques for getting guests to stay at your hotel longer and then commit yourself to that strategy with no wiggle room.
Remember that things like your promotional efforts are based on data that you have collected and expert feedback from marketing consultants you have on your team. You’re doing what the numbers say you should, but don’t be afraid to try something else if what you’re doing doesn’t seem to be working.
If you find that what you’re doing to try to increase average guest length of stay isn’t working, you can always go back to the drawing board. Also, if you find that guest stays are alarmingly short or the number seems to be moving in the wrong direction, it’s helpful to reach out to guests to find out what went wrong.
Consider sending guests a short survey via email after they have stayed at your hotel. Ask them what they liked and didn’t like.
You might convince them to complete the survey by saying you’ll enter them in a drawing for a free night’s stay at your hotel or something similar. Getting direct feedback from customers can be extremely helpful if you’re trying to land on a strategy that gets them to stay longer.
You should also be aware that you can partner with some companies that can help you increase your ALOS in various ways. For instance, take the example of Surf Office. It is a facilitator of company retreats & offsites for various business entities worldwide.
By partnering with a company like Surf Office, you can target particular groups with longer stays. In Surf Office’s case, the primary demographic is companies that are looking to set up and facilitate a corporate retreat for their workers. If that is a group for which you think your hotel would be suitable, this makes sense to do.
Surf Office is capable of increasing the ALOS of groups that they send to your hotel. In 98% of cases, the weekday ALOS of groups affiliated with Surf Office is higher than that of other segments.
You can easily see how that would be valuable for your hotel if you feel that you’re equipped to handle corporate retreats. That won’t be an ideal demographic for all hotels, but it will be for many of them.
To further break down what a partnership with Surf Office could mean, its data reveals that in urban locations, the groups they send to your hotel will stay for a minimum of two nights, and usually more than that.
As for other, non-urban locations, such as hotels in the mountains, by the beach, in the countryside, and so forth, the ALOS of groups sent by Surf Office is even higher. If your hotel is in one of these locales, expect these groups to remain with you for a minimum of a three-night stay, and usually more.
In addition to getting higher ALOS from the groups that a company like Surf Office can send to you, the TRevPAR you get is always considerably higher than you might expect from other segments of the population that might stay with you. TRevPAR is shorthand for total revenue per available room. In other words, it is an assessment of the total income that your hotel generates using a per-available-room basis.
TRevPAR is just as meaningful of a metric for calculating success as ALOS. Once you understand this, it becomes obvious how partnering with one of these companies that can deliver you whole groups of customers at the same time always guaranteeing revenue in rooms, F&B and meeting rooms, can help your hotel thrive.
Now, you know all about length of stay and some ways you might potentially get that number up.
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Hotel owners must handle many aspects of their hotel’s day-to-day operations. There are many responsibilities, and you can’t afford to neglect any of them. That certainly applies to hotel revenue management.
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