Discover what a booking window is and how it can help you secure more bookings for your hotel or lodging facility.
What is the Booking Window?
The booking window refers to the period between when a client books a room and their actual arrival at your facility. It indicates how far in advance guests book with you. This timeframe varies based on factors like the characteristics of your property, your clientele, location, time of year, and other crucial elements.
NB: This is an article from Smartpricing
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Why is the Booking Window Important for Your Hotel?
Knowing how far in advance your clients book allows you to determine the best time to offer your rooms at the most profitable rates. If revenue management is about selling at the right price at the right time, then understanding the booking window is key to identifying that opportune moment.
Leveraging the Booking Window in Revenue Management
Imagine your accommodation’s peak period is around August 10th, and the booking window for this period is three months. This means guests staying on August 10th likely book around May 10th. During this time, as demand surges and room availability decreases, prices naturally rise.
This is the ideal time to sell the maximum number of rooms at the highest possible rates.
Conversely, prior to this peak, demand is lower and room availability higher, suggesting more attractive rates to entice early bookers. However, setting rates too low can lead to premature sales at lower prices, leaving fewer rooms to sell at higher rates later on.
Calculating Your Booking Window
To calculate your average booking window, analyze historical booking data. Look at past years and note when most bookings were made for specific dates or periods. Nowadays, tools like channel managers or OTA (Online Travel Agency) platforms can instantly provide these insights. However, always compare OTA data with other booking channels for a complete picture.
Factors Influencing the Booking Window
- Events and Festivals: Unexpected events can suddenly increase room demand, creating variable booking windows. For example, an international sports event could spike bookings around ticket release, months in advance.
- Weather: In weather-sensitive times, the booking window might shrink as guests wait to see the forecast before booking.
- Active Distance to Date: This factor indicates when guests begin their journey to your property. Shorter active distances can mean last-minute bookings, while longer distances typically require more advanced planning.
- Geographic Origin of Guests: This affects not just active distance, but also holiday calendars, which vary globally. For instance, Chinese New Year significantly impacts booking windows for Chinese tourists compared to other guests.
Two Common Booking Window Mistakes to Avoid
- Selling All Rooms Too Early: If your hotel is fully booked months ahead for peak weeks, you’re potentially losing revenue. During high-demand periods, keeping a significant number of rooms available allows you to capitalize on higher rates.
- Ignoring Active Distance When Selling Last-Minute: Going beyond the booking window can be risky, but surpassing active distance is almost a guaranteed loss. Tailor last-second offers based on the typical active distance of your clientele.
Conclusion
The booking window is a crucial aspect of revenue management. Not understanding it exposes you to significant risks, including missing out on potential clients and revenue.
Each client segment, especially if sizable and distinct, should have its booking window marked on your calendar.
By mastering this concept and avoiding common pitfalls, you can significantly enhance your hotel’s profitability and operational efficiency.
Stay ahead in the hospitality game by mastering the booking window and strategically planning your revenue management!
If you want to get up to speed with your revenue management skills, our Complete Guide to Revenue Management offers all the fundamental insights and tools you need to begin and elevate your pricing strategy. Download your free copy now!
