A common view of the extended stay industry is that challenges all hotels face – from balancing availability to managing pricing – are amplified in this market. Could it be, though, that opportunities are amplified too?
The opportunity for revenue optimisation in the serviced apartment industry is real and achievable – it all depends on your approach.
The serviced apartment sector is a rapidly growing segment within the wider hospitality industry, in large part because it appeals to so many different kinds of potential guests.
Guests use serviced apartments for a variety of reasons, ranging from construction crews working on a multi-week project to guests who prefer suite-style or apartment lodging.
Serviced apartment owners benefit it two key ways. Firstly the cost of service typically drops for longer length-of-stay (LOS) business – additionally their properties maintain a relatively constant occupancy throughout the week as compared to city centre hotels and weekend resorts.
Market segmentation, therefore, is a critical opportunity for serviced apartments.
Identifying the type of guests staying at a particular property requires reliable separation of data and grouping for accurate forecasting. Understanding and accounting for key demand factors for each business segment serves as the most reliable basis for key business controls to drive profitability.
This includes setting the right price, achieving the right mix of guests, achieving the right length-of-stay (LOS) mix, setting appropriate over-sales limits in order to avoid lost revenues and applying the right mix of pricing and inventory controls to achieve profitable growth.
An advanced revenue management system can facilitate this kind of forecasting. It takes into account demand by arrival date and length-of-stay, cancellations and no-shows, extensions, early departures and more.
This capability to analyse data and generate robust forecasts, as well as optimise for maximising RevPAR or ProPAR, is where many current revenue management systems fall short.
