Nowadays, LOS is a phrase commonly used in the hotel industry. It is also one of the strategies utilized to assist hotels in calculating income in the most efficient manner. So, what is LOS? What are the 3 types of LOS in the hospitality industry? Follow the article below of Hanami Hotel Danang to get the answer!
What is LOS?
LOS is an abbreviation for Length of Stay, which is a term that refers to a customer’s stay at a hotel. This can also be regarded as an important indicator in hotel management, assisting the hotel to calculate accurately revenue on a basis.
Regularly monitoring the LOS index helps the hotel in understanding the current business situation. As a result, the owners can develop effective solutions and strategies to assist the hotel in increasing the number of rooms sold and maximizing room sales, thereby maximizing revenue and profit.
3 types of LOS in the hospitality industry
LOS is currently classified into three basic categories in the hotel industry: MinLOS (minimum length of stay), ALOS (average length of stay), and MaxLOS (Maximum length of stay).
Minimum length of stay – MinLOS
MinLOS stands for Minimum Length of Stay which refers to a customer’s minimal duration of stay at a hotel. Business managers have created MinLOS with the aim of maximizing hotel revenue.
The purpose is not to miss the availability of rooms and maximize the number of rooms sold to increase revenue and profit for the hotel. Currently, most hotels regularly control the number of the duration of stay for individual guests, couples, families, or groups in order to reduce the number of short-term guests.
During the peak season, hotels typically use MinLOS. This is a method for reducing the number of short-term visitors. The refusal of guests to stay 1 night or last-minute bookings, to facilitate long-term rentals, or to regulate bookings to enhance booking productivity room for the next day.
Average length of stay – ALOS
Average Length of Lost or ALOST is referred to as the average length of stay of a customer at a hotel. This index is also used to measure and forecast the value of customer segments when they stay at a hotel.
ALOS can be calculated as follows:
ALOS = Total number of rooms used in the hotel / Total number of rooms booked
Maximum length of stay – MaxLOS
MaxLOS stands for the phrases Maximum Length of Stay. This term refers to the maximum duration of stay of a customer at a hotel.
This is a business strategy launched with the aim to limit the number of nights a customer stays. The maximum length of stay of the customer is used until the hotel business manager predicts the period of time when the hotel will sell out the rooms at the best price.
Besides, some hotels apply promotions and discounts. And the MaxLOS index will be implemented to minimize the number of days of discounts and promotions.
The hotel can use some of the following calculation methods for some guests who want to stay longer than the maximum length of stay:
- Maximum discount for hotel nights and guests will pay regular rates for additional nights.
- Higher rates for extra nights duration of stay.
When applying the strategy, MinLOS and MaxLOS will both produce some profit, assisting the hotel in increasing revenue. To achieve this well, however, the hotel needs to generate accurate projections about the time slots where clients have strong booking demand. Because if the wrong strategy is applied, the hotel’s revenue can be severely reduced.
The application of the LOS index in the hotel industry is required if the hotel is to function well. The above post has been shared with you ‘what is LOS? 3 types of LOS in the hospitality industry’. Hanami Hotel Danang hopes you have had useful information to apply LOS in the hotel business.