Understanding Length of Stay pricing: Insights from our Lunch & Learn session at Here To Stay conference 2024

Published Thu Oct 31

In a recent session at the Here To Stay conference held in Brisbane, Australia, the Homhero team discussed the intricacies of Length of Stay (LOS) Pricing. The panel consisted of Homhero Co-Founders Kim Richardson and Hayden D’Arcy alongside experienced property manager Pete Smith, who shared insights and operational strategies for maximizing revenues using this pricing model.

Key Takeaways:

  1. Definition of Length of Stay Pricing: It’s crucial for property managers to effectively understand and utilise this pricing model, which dynamically adjusts rates based on various stay combinations.
  2. Major Benefits: Length of Stay pricing enables flexibility and increased revenue by allowing property managers to offer multiple rate options based on guest stays, improving booking opportunities.
  3. Dynamic Pricing Integration: Length of Stay pricing integrates seamlessly with OTAs allowing for robust pricing strategies without overwhelming manual adjustments, enhancing operational efficiency.
  4. Handling Booking Costs: The method allows for comprehensive cost coverage, which incorporates all associated fees into the pricing, eliminating hidden costs for consumers.

Definitions and General Insights

Length of Stay Pricing is a model that defines rates based on the duration of a guest’s stay. As Homhero Co-founder Kim Richardson explained, it calculates rates for various combinations of lengths of stay, guests, and dates, which results in dynamic pricing.

Key points discussed include:

  • Multiple Calculation Variables: The model can create thousands of pricing combinations. For example, with various guest levels and durations, property managers can determine the optimal pricing strategy.
  • Market Positioning: Offering one-night stays with flexible pricing can capture a significant portion of potential guests who may otherwise look elsewhere.

Benefits Discussed

The session highlighted several benefits that Length of Stay Pricing brings to property managers:

  • Increased Revenue Opportunities: By allowing diverse stay lengths with tailored pricing, managers can capture bookings that would be lost if only standard nightly rates were offered.
  • Simplified Management: By using LOS pricing, property managers can reduce the complexities typically involved with maintaining multiple rate types across various properties.
BenefitDescription
Flexibility in PricingEasily adjust rates without complex manual updates across multiple properties.
Capture Extended BookingsAttract guests looking for one or two-night stays effectively.
Integrated Cost ManagementSet triggers within the pricing model to account for variable costs efficiently.

Real-World Applications

The panelists discussed real-world scenarios demonstrating how various pricing strategies have allowed them to optimize their operations. For example:

  • One-Night Stays: Pete Smith, founder of Weekenda and Homhero’s first client, discussed successful implementation of pricing strategies allowing one-night bookings.
  • Series of Discounts: Implementations such as “pay for two nights, get one free” showcase the flexibility for attracting more guests whilst maintaining competitive rates.

The Length of Stay Pricing model presents a significant opportunity for property managers to increase revenue and streamline operations. With dynamic pricing integrated seamlessly into OTAs and the ability to cover booking costs within the pricing structure, businesses can respond rapidly to market fluctuations with refined strategies.

The energy among the panelists and the positive feedback from attendees further emphasized the potential for applying innovative thinking to property management pricing strategies.

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