May 18, 2024

Can Open Pricing Support BAR by LOS?

What a BAR by LOS technique does is it enables hotel revenue supervisors to flex their costs according to various lengths of stay. It sounds basic however feeding this into your circulation channels can be complicated.

NB: This is an article from Duetto

The greatest benefits of operating a BAR by LOS strategy in tandem with Open Pricing featured properties that commonly accept long-stay visitors; resorts that usually have a typical length of stay of 7-14 nights, or aparthotels that might have visitors sticking with them for anything from one to 365 days.

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Open Pricing and BAR by LOS– could they ever be pals? Yes, they can.

What is Open Pricing?

Open Pricing is the capability to price all space channels, types, and dates independently of each other to optimize revenue without needing to close any off.

What is BAR by LOS?

BAR by Length of stay (LOS) is a BAR rate that is dynamically priced based on the number of nights a guest has actually scheduled at the hotel. The BAR rate for a seven-night booking will often be lower than the BAR rate for a single night.

How can these two various rates practices work together?

” Having worked in the aparthotel sector for a long period of time, and handled longer lengths of stay, the benefit is that you can manage your length of stay. You understand for how long your customers are going to stay, and as such, you can make the most of on rates for your shoulder nights because they are remaining for longer,” discussed Melody Grelat, Senior Customer Success Manager, EMEA, Duetto.

” You have far more control over the discount rate due to the fact that it is coming off an enhanced Open Priced rate,” she included.

Operating both systems in tandem can make it possible for properties to take full advantage of stock. These advantages originate from a shift in lead time and length of stay patterns, resulting in ADR and RevPAR development. Longer stay patterns tend to have a longer lead time and for that reason frequently book outside the “rates adjustment” window, thus resulting in a greater ADR. This makes it possible for hotels to build out stronger base service.

Playing Inventory Tetris

THE FLAG operates AutoPilot on all short-term business, and in 2019 this method enabled Kuch to increase ADR by 5%.

” We have 75% long stay as the rest and a base is more transient. With 75% of the stock already offered that gives me much more self-confidence to play with rates and be more aggressive,” Kuch told us.

” Because we are exceptionally flexible our clients dont need to be connected to simply something. Here is Open Pricing supporting BAR by LOS. This is what we can do with the flexibility of our system,” Galvao stated. “If youre attempting to optimize what you can do with your stock, then that ends up being a possibility.”

BAR by LOS allows specific home types to build a solid base organization, however the big gains can come over enhancing the single nights or short-stay stock that remains. Selling these on a totally optimized Open Pricing rate can improve the bottom line, as our client Florian Kuch, Revenue Manager at THE FLAG, described in this blog: Exceeding Expectations On A Tuesday.

Joyce Galvao, Director of Customer Success, Duetto, discusses it as a video game: “Imagine you are playing Tetris with these stay blocks. You have individuals all staying for different lengths, so you can slot them into the system to your benefit. It does allow for better inventory management.”

More Control On Discounts

Pia Leonard, Director Strategy and Business Development, Victors Residenz-Hotels, explained this in more detail: “Length of stay rates is the logical advancement of open demand-based pricing. Every day of the week and length of stay combination has a certain need and desirability and should for that reason have a vibrant and individual price. This allows the hotels to be more competitive in the market not simply through vibrant Open Pricing, but taking into account the arrival and stay patterns, driving more company into shoulder dates with more effective lengths of stay.

In durations of low need, being extra competitive on rates can be the difference in between securing the reservation or not. It can also help you sell those low-demand Sunday nights that may not always shift.

Running an Open Pricing strategy in tandem with BAR by LOS can assist certain homes to get more control of their discounts.

Bringing Open Pricing into the equation suggests that every night of that seven-night stay has its own rate, discounted to account for the longer length of stay. This may mean that Friday and Saturday are at $150, while Sunday is $125, and the rest of the nights are $135, but every single one of these rates is then marked down by 10% to account for the longer stay, and the overall seven-night plan is presented to the customer.

Heres how. Frequently, a BAR by LOS system will take the highest BAR rate for the period in concern. If you are pricing on a seven-night stay, which would consist of a peak weekend period, the total rate will be dictated by those peak rates. This may not be the most competitive package to go to market with.

” Some peak days may see a little decrease in day-to-day ADR, but the total RevPAR result will be higher, due to the gain in tenancy at great ADR on the shoulder or less desirable days. In particular throughout slower times, like off-season, throughout a pandemic or post-pandemic , this does supply a visible benefit.”

Setting Rate Boundaries

Open Pricing can make it possible for residential or commercial properties to get even more granular with their pricing technique through BAR by LOS. By setting flooring and ceiling (min/max) rates and pushing an automatic Open Pricing strategy that is specified by season, by day of the week, by day before arrival, or any other appropriate limitation, hotels can deliver dynamic prices and not simply a fixed portion of discounts.

Can Open Pricing and BAR by LOS be pals? The versatility of the Duetto platform suggests that each can have its place in the profits technique of certain home types.

Running an automated Open Pricing technique means that, as you get closer to stay date (for example 7 days out), you can override all BAR by LOS rates and just provide your optimized one-night rate, no matter the length of stay, to enhance that last earnings capture.

Find out more short articles from Duetto

BAR by Length of stay (LOS) is a BAR rate that is dynamically priced based on the number of nights a guest has actually booked at the hotel. Longer stay patterns tend to have a longer lead time and therefore typically book outside the “pricing modification” window, hence resulting in a greater ADR. If you are pricing on a seven-night stay, which would include a peak weekend period, the overall rate will be dictated by those peak rates. Pia Leonard, Director Strategy and Business Development, Victors Residenz-Hotels, discussed this in more detail: “Length of stay pricing is the rational development of open demand-based rates. This enables the hotels to be more competitive in the market not simply through dynamic Open Pricing, however taking into consideration the arrival and remain patterns, driving more organization into shoulder dates with more suitable lengths of stay.