In today's highly competitive hospitality industry, hotel managers need innovative strategies to drive direct bookings, increase occupancy, and build guest brand loyalty. One proven but often overlooked tactic is leveraging stay rooms - rooms set aside for last-minute bookings at discounted rates.
Implementing an intelligent and effective stay room strategy can be a game-changer for large hotel chains and independent properties. This article will explore a stateroom approach, its key benefits, and, most importantly, how hoteliers can develop an effective method to maximise occupancy and revenue.
Whether you want to incentivise direct bookings, attract locals with staycation deals, or drive last-minute occupancy from impulse travellers, a stay room strategy allows you to fill rooms that would otherwise sit empty. Let's dive into the details of constructing a winning stayroom program.
Key Takeaways
- Leverage stay rooms to drive direct bookings and loyalty
- Strategically overbook rooms to maximise occupancy
- Offer discounted stay room rates to incentivise booking
- Partner with local businesses to create staycation packages
- Utilise dynamic pricing and deep discounts to fill last-minute vacancies
Table of Contents
What is an Effective Stay Room Strategy?
A stay room strategy refers to allocating a set percentage of rooms to be saved for last-minute bookings at reduced rates. These rooms are not released in advance or on public booking channels. Instead, they are intentionally held back for:
- Last-minute impulse bookings
- Walk-in reservations
- Overflow and emergency stays
- Discounted packages and promotions
The goal is to strategically overbook rooms beyond your forecasted occupancy to capture unanticipated demand. Stay rooms offer flexibility - they can be released to the general inventory if not booked or swallow unexpected overages without turning away guests.
Benefits of Implementing an Effective Stay Room Strategy
When designed well, a stateroom strategy provides the following benefits:
- Increased occupancy % - By overbooking rooms, you fill vacancies that arise from no-shows, cancellations, and fluctuating demand. This boosts your overall occupancy.
- Higher ADR - Last-minute stay rooms are often booked at BAR (best available rate), bringing up your average daily rate.
- Direct bookings - Stay rooms incentivise booking directly by offering discounts, spurring impulse bookings.
- Local/leisure demand - Attract local staycations and weekend impulse travellers with discounted stay room packages.
- Customer loyalty - Fosters retention by offering last-minute discounted rates to repeat guests.
- Brand exposure - Gets new guests in the door who might upgrade or return at standard rates after experiencing your property.
- Revenue opportunities - Unlocks new incremental revenue streams from filled rooms.
Let's explore constructing an effective stay room strategy tailored to your unique hotel and market.
How do you develop an effective stay room strategy?
Follow these best practices to build a revenue-generating stay-room program:
Forecast Demand and Set Stay Room Rates
The first step is forecasting your demand and occupancy patterns based on historical data. Analyse no-show and cancellation rates. Look at unsold rooms by day of the week. Then determine.
- Number of rooms to hold back as stay rooms
- Minimum stay room rate - set at 20-30% below BAR
- Dynamic discounts - more significant discounts for high-need dates
Holding back 10-15% occupancy as stay rooms gives flexibility without excessive risk. Avoid deep discounts that devalue BAR.
Strategically Overbook Rooms
Based on your forecast, overbook stay rooms at a higher target occupancy than your historical averages. For example, aim for 85% rather than your typical 75% occupancy.
Strategically overbooking by 10-15% helps fill vacancies but leaves a safety margin to avoid excessive walk-aways.
Offer Stay Room Discounts and Packages
Develop promotional packages around your stay rooms to boost direct bookings. Offer:
- Advance purchase packages - book 14 days out for 25% off
- 48-hour flash deals -48 hrs only: stay two nights, get 3rd night free
- Loyalty packages - extra 10% off for members
- Add-on packages - dinner/spa credits included
These incentivise booking directly and lock in incremental revenue.
Partner with Local Businesses
Collaborate with local attractions, restaurants, and services to offer discounted staycation packages. Examples include:
- Hotel + museum/theatre tickets
- Hotel + spa or meals
- Hotel + round of golf
- Hotel + rides to local wineries/breweries
This stimulates leisure demand and unlocks deals for locals. Co-market packages.
Alt-Title: A guest enjoying his stay at the hotel with amazing views.
Utilise Dynamic Pricing
Use dynamic pricing for stay rooms based on forecasted demand. Offer deeper discounts on need dates when occupancy is lower. Maintain higher stay room pricing on peak occupancy dates.
This maximises revenue by aligning the rate to demand. Automated yield management systems dynamically adjust rates.
Maximising Occupancy with an Effective Stay Room Strategy
A well-planned stayroom strategy allows you to push occupancy dramatically higher. Consider these results:
- 10% stay rooms could increase 65% occupancy to 80%
- 15% stay rooms could increase 75% occupancy to 90%
The key is strategic overbooking, discounted rates, and marketing tactics incentivising direct booking. Mastering the stayroom strategy gives you a lever to drive occupancy, ADR, and revenue.
Conclusion
Stay rooms present a vast revenue opportunity often overlooked by hotel managers. Hotels can drive higher occupancy and increase incremental revenue from filled rooms by strategically overbooking spaces and offering discounted rates for last-minute bookings.
Savvy hoteliers utilise stay rooms to incentivise direct bookings, capture last-minute demand, attract local leisure travellers, and build loyalty.
To maximise your results, forecast intelligently, set strategic stay room rates, promote direct booking packages, utilise dynamic pricing, and form local partnerships. A stay-room strategy can boost occupancy by 10-15% or more.
Unearth this hidden revenue stream for your hotel today. Contact Emersion Wellness to receive expert guidance on implementing a stay-room strategy tailored to your property and market. Our innovative revenue generation strategies deliver rapid ROI and long-term profits. Call today to discuss how we can help increase your hotel bookings and revenue.
FAQs
Q: How many rooms should be set aside as stay rooms?
A: A good rule of thumb is to allocate 10-15% of rooms as stay rooms to allow flexibility. Analyse historical occupancy data to determine the ideal number.
Q: What is the best way to price stay rooms?
A: Use dynamic pricing tied to forecasted demand, with minimum rates set 20-30% below BAR. Offer deeper discounts on need dates when occupancy is lower.
Q: How do I market stay-room deals?
A: Promote direct booking packages online and via email. Offer advance purchases, flash sales, loyalty rates, and local staycation deals. Partner with concert venues, spas, golf courses, etc., to create packages.
Q: Should I load stay rooms in the OTA channel?
A: Avoid loading stay rooms in OTA channels. Reserve them exclusively for direct bookings to incentivise booking on your site. However, you can optionally open stay rooms to OTAs at the last minute if they are unlikely to sell.
Q: When should stay rooms be released to general inventory?
A: Release unsold stay rooms to general inventory 2-3 days before arrival. This avoids empty spaces but gives sufficient last-minute availability for stay bookings.
Q: How does overbooking with stay rooms impact guest experience?
A: Overbooking slightly above historical occupancy poses a minimal risk with a proper safety margin. Empower staff to promptly walk guests to comparable nearby properties if occupancy exceeds rooms.
Q: Should I offer stay rooms on peak/sold-out dates?
A: Avoid discounts on peak dates where you can sell out at BAR. But do overbook at full BAR to capture overflow demand.
Q: What hotel types benefit most from an Effective Stay Room Strategy?
A: Leisure hotels, resorts, independents, and boutiques earn the most from stay rooms. Chains benefit but with less dramatic results.
Q: What happens if I don't sell all my stay rooms?
A: Release unsold stay rooms to general inventory to avoid empty spaces. Ideally, 10-20% will go unsold - indicating an ideal overbooking margin.
Also see: Increasing Your Hotel's Potential with Business Intelligence.
I'm Nathan Baws, a nutrition nerd, exercise and weight loss expert, and an unwavering advocate for good health. As the founder of Emersion Wellness, I'm passionate about crafting Seamless Weight Loss Programs to supercharge hotel revenue and transform lives. We've pioneered the World's First Plug & Play Weight Loss Programs for top hotels and resorts, sparking a wellness revolution. Beyond my professional journey, you'll often find me hiking, swimming, and riding the waves, embracing every moment in nature. Join me on this exhilarating journey towards diet, health and wellness.
