Step 2: Analyze Hotel Performance
& Trends
This part of the analysis will help
you:
- Understand demand for your hotel based on length of
stay (LOS).
- Recognize if there are significant differences in
demand by room type or business segment.
- Determine if there’s an opportunity to create new LOS
tiers or adjust existing ones.
1)
Review Historical Data by Length of Stay (LOS)
Start by reviewing your hotel’s
historical data to identify its key LOS patterns.
a) Use the Tier Evaluation Report
This report gives insight into performance metrics by LOS, but keep in mind
that it includes 'stay-throughs' (guests staying multiple nights), which may
cause differences between the 'RNs' (Room Nights) and 'Accommodations' columns.
- Metrics like Room Nights, Rate, Revenue, and Price
Sensitivity account for these stay-throughs.
b) Choose the Relevant Report
- Use the "last 13 periods" report for a
year-long overview of data. Validate findings with the "last 3
periods" report to check for seasonal variations.
- Focus on either total hotel data or specific room
types/business segments that account for most of your weekday and extended
stay transient business.
c) Review Rate Patterns
- Expect lower rates in the first tier (e.g., 1-4 days)
due to discounted weekend rates.
d) Evaluate Key Metrics
- The columns for Mix of Room Nights (RNs),
Accommodations, and Revenue help you identify the most valuable LOS for
your hotel.
e) Assess Demand Changes
- Look at the Demand and Mix Demand columns to check
which LOS is most in demand. Consider changes year-over-year and seasonal
variations.
f) Analyze Price Sensitivity
- Check if price sensitivity is significantly affecting
demand. As LOS increases, price sensitivity often rises since longer stays
typically come with price expectations.
g) Examine Turndown Metrics
- The ‘all turndowns’ and ‘arrival turndowns’ columns
provide insight into how many bookings were rejected.
2)
Identify Opportunities for New or Extended LOS Tiers
a) Print and Review Your Tier
Evaluation Report
- Mark the current LOS tiers on the report, such as 1-4,
5-11, 12-29, and 30+.
b) Focus on Specific LOS
- Pay special attention to LOS values near the current
tier borders, as well as stays beyond 30 days.
c) Analyze Demand and Price
Sensitivity
- Are there any LOS with high demand and low price
sensitivity compared to the previous tier? This may indicate an
opportunity to extend the LOS or combine tiers.
d) Consider Competitor Impact
- Factor in how your competitors' LOS pricing strategies
may affect demand at various LOS levels.
3)
Identify Key and Non-Essential LOS Tiers
a) Use the LOA Demand Eye Chart –
Summary Report
- This report allows for a quick review of historical LOS
performance.
b) Review Mix of Room Nights and
Demand
- Identify which LOS tiers produce the most room nights
and demand. Look for any shifts in trends over time.
c) Evaluate Price Sensitivity
- Consider how price sensitivity has evolved by LOS tier
and how this impacts occupancy rates.
d) Compare Weekday vs. Full Week
Reports
- Weekend business often has lower rates, so comparing
both reports can offer a clearer view of weekday performance.
Hotel
Assessment Summary
By the end of this step, you should
be able to determine whether there is an opportunity to:
- Create a new LOS tier.
- Consolidate two existing tiers.
- Extend an existing LOS tier.