LOS is a familiar term in hotel business. Hotel managers often use LOS as a strategy to increase business efficiency. So what is LOS? What are the 3 basic types of LOS in hotel business?
What is LOS?
What is LOS? LOS stands for Length of Stay, which means stay time. This is the term used in the hotel business to indicate the length of stay of the customer at the hotel. This is an important indicator of a hotel’s revenue management.
Showing the LOS index of customers helps managers make appropriate measures to bring the highest revenue from hotel room sales. Depending on the time, each room type that LOS indicators are given are different.
3 types of LOS in hotel business
In the hotel, there are many different types of LOS to apply to each room type in different time parts. In particular, the three basic LOS types are ALOS, MinLOS and MaxLOS.
What is ALOS?
ALOS stands for Average Length of Stay. This is the term for the average length of stay in a hotel.
The ALOS index is used to measure and predict customer values in different segments. The calculation of ALOS is also used to evaluate the effectiveness of hotel customer attraction and retention strategies .
The average length of stay is calculated according to the formula:
ALOS = Total number of night rooms used / Total number of rooms booked
What is MinLOS in the hotel?
MinLOS stands for Minimum Length of Stay, meaning the minimum length of stay at the hotel. The MinLOS index is not an index calculated by formula like ALOS but an index set by hotel administrators.
In a hotel, at a certain time, when a retail customer comes to rent a room, their number of days of rent will have to reach a certain time. If booking is shorter, they may not be able to rent the room they want.
There are many reasons for the hotel to offer a minimum stay for customers. In particular, the most common reason is to limit retail customers, maximizing profits from selling rooms. With the application of MinLOS, the hotel can accommodate 1-night tenants, creating opportunities for guests to rent rooms with more time. MinLOS policies in hotels are often applied at the beginning of peak season.
For example: the night of 12/8 takes place the international fireworks final. Many people want to book a hotel room this night. At that time, many guests will not be able to book a week continuously here. The offer of MinLOS helps hotels restrict retail customers, booking for a short time. Those who want to attend the event are required to extend their booking time. Since then, the hotel has sold more rooms in the longer term, increasing sales.
What is MaxLOS?
MaxLOS stands for Maximum Length of Stay which means maximum stay time of customers at the hotel.
MaxLOS is a business strategy designed to limit the number of nights that guests stay. This index is also offered by the hotel when predicting how long the hotel will be able to sell the room at the highest price. When hotels use discount programs, they can also offer MaxLOS to limit the number of discounts.
When wanting to apply MaxLOS, hotel managers must predict which rooms are likely to sell to other customers at a higher price. If the prediction is incorrect, the business strategy with MaxLOS will not succeed.
For guests who wish to extend their stay beyond MaxLOS, the hotel will set up 2 options for guests to choose from:
- Increase room rates in extra days. The price increase will be agreed or specified by the hotel.
- Apply promotional rates for previous nights and normal rates with nights beyond the hotel’s maximum storage period
Whether applying MaxLOS or MinLOS, want to bring real business efficiency to hotels, hotel managers must have accurate predictions about the ability to sell rooms during and before. If there are inaccurate predictions, business operations will likely incur losses, inefficient. Therefore, need to consider carefully the strategies before set out.