Study Reveals that 63% of Hotels Almost Never Apply Any Kind of LOS Discount

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Study Reveals that 63% of Hotels Almost Never Apply Any Kind of LOS Discount

05/31/2019

OTA Insight, a cloud-based data intelligence platform for the hospitality industry, released a new Length-of-Stay (LOS) Strategy Report. Examining the rates of over 50,000 hotels globally, based on data derived from the company’s Rate Insight platform, the report provides a comprehensive analysis on the number of hotels that apply a level of discounting in return for a guaranteed number of nights (LOS discount), how often they apply it, the size of discounts, and what key takeaways can be extracted from these different strategies.

From Asia to Latin America, one overriding trend seen among the 51,075 hotels analyzed worldwide was that a large proportion of hotels (63%) almost never apply any kind of LOS discount. Of the 37% that do offer LOS discounts, 71% discount for 10 or more days in the period analyzed. Overall, the frequency of hotels applying different discounts varies, in some instances significantly, with discounts applied most consistently, by major chains, followed by 3- and 5-star hotels.

Among the report’s other key findings are:

  • Most hotels that apply a LOS discount will usually not apply one higher than 15%.
  • Some hotel chains can be grouped together by similar average discount frequencies, but the way hotels within each chain apply discounts can vary significantly.
  • The majority of chain hotels with LOS discounting strategies discount between 30-65% percent of the time.
  • The percentage of hotels consistently discounting on LOS (at least 10 LOS discounting dates) by region is:
    • North America - 36%
    • Middle East - 29%
    • Asia - 28%
    • Australia and New Zealand - 21%
    • Europe - 15%
    • LATAM - 12%

Methodology

OTA Insight compared three consecutive one-night prices at each property with the price for a length of stay of three nights, analyzing by every room type separately, taking two-person, cheapest flexible rates. Discount sizes and discounting frequencies are inferred based on these sample sizes:

  • Number of hotels with at least 30 future price dates advertised on the date the report was initiated: 51,075
  • Of those, hotels with LOS discounts with at least 10 dates that have a discount for longer length of stay: 13,237

The conclusions featured in the report are based on data derived from OTA Insight’s Rate Insight platform, which provides hoteliers with real-time access to current, future and past rates and other factors impacting demand for their hotel rooms. For more information about these findings, download the full report here.

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