Stay restrictions have been a popular tool for revenue managers at large hotel chains and hotels. These strategies may seem too complex or time-consuming to implement when you are working alone or in a small group.
You may not be able to devote the time and expertise necessary to regularly change these settings, or to analyze their results to refine them further. You may not have the time or expertise to change these settings regularly and analyze results.
Restrictions are one of the easiest yet most effective revenue management tools. And with the right automation, you can remove the guesswork – letting the technology work quietly behind the scenes to boost your profitability.
Virginia McShane is a member of the Revenue Strategy Services Team at Lighthouse and has years of experience in boutique hotels. She shares in this blog her expert insight and go-to strategies to help independent hotels like you set up the right restrictions.
Discover more by reading on:
- How to manage revenue and understand what stay restrictions are.
- How to and when to restrict your access.
- A hotel revenue expert shares real-life examples and practical tips.
- Automating restrictions is a great way to increase revenue.
Learn how to use stay restrictions and how revenue managers can make the most of them.
What are hotel restrictions?
The settings for stay restrictions or control of stays determines what and when guests can book. The settings are a filter that only allows guests to book if they have a specific duration of stay or certain arrival and depart dates.
These stay restrictions can be determined by a demand forecast well in advance. Multiple restrictions can be combined in order to optimize booking patterns during periods of high demand. It doesn’t matter what stay control you use, your goal is always to maximize the revenue from your bookings while avoiding leaving too many empty rooms.
Here are five types of restrictions used in revenue management.
- Minimum Length (MinLOS) of Stay: Guests have to book at least certain nights in a line.
- Maximum Length (MaxLOS) of Stay: Guests are not allowed to stay beyond a certain number of nights.
- Closed-to-Arrival (CTA), guests cannot check in at certain dates.
- Closed for Departure: Certain dates are not available to check out.
- Minimum Price: (Hurdle price) Guests cannot book below a specific rate.
Why is hotel revenue management important?
Restrictions are a way to protect dates of high value from going squander and prevent money being left on the table when bookings or guests with higher values receive preference.
You can optimize your business by strategically aligning the restriction settings to (forecasted demand). maximize revenue per available room (RevPAR) It will also help to prevent revenue loss due to unsold rooms in peak periods, and increase occupancy in slow periods. It also encourages guests to stay longer, resulting in additional revenue from your restaurant or bar, spa, and other services.
Lighthouse revenue expert Virginia McShane It is impossible to overstate the importance and effectiveness of restrictions. “Restrictions represent one of independent hotels’ most effective yet underutilized revenue levers. You can control when people book and what they pay without having to change your pricing strategy. Every room night is important for boutique and lifestyle hotels that have limited inventory. “Unlike larger hotels, which may be able to absorb inefficiencies through scale, smaller properties must be more vigilant and protective during peak periods.”
Restrictions are one of the best revenue levers that independent hotels can use. Each room night counts for properties that have limited inventory. Virginia McShane Senior Manager, Revenue Strategy Services at Lighthouse
As part of their revenue strategies, large hotel groups use restrictions to ensure that every room generates the maximum profit. Revenue managers, for example, will restrict one-night bookings during busy weekends in order to guarantee that rooms are occupied by the same guests for a minimum of two nights. They may also set a price minimum to prevent rooms from being filled too quickly with low-value guests when other, higher-paying customers might be just as interested.
The result is that independent hotels miss out on hidden opportunities and leave their availability available to anyone, even if it’s not profitable. This results in that larger competitors They can monitor demand patterns and adjust accordingly. This will only increase their market share, making it difficult for smaller accommodations.
Now is the time to equalize the playing field. Below, you’ll find key restriction strategies and how to apply them – explained by experienced Lighthouse revenue manager Virginia McShane.
How can you use restrictions to increase bookings, revenue, and profit?
Restriction No. 1: Minimum Duration of Stay (MinLOS).
What is it?
MinLOS requires that guests book a minimum of nights. This control is very useful when there are high demand periods or popular events. This prevents guests booking short stays that can cause gaps in occupancy, and increase work for front desk and housekeeping teams because of more frequent check-ins and check-outs. By encouraging guests to stay longer, a minimum-length-of-stay can help boost occupancy for shoulder dates.
When to use: Weekends (peak), holidays, bank holidays and shoulder days
Example: You anticipate high demand at a local festival. Set a minimum of 2 nights to avoid blocking your calendar with one-night reservations and to prevent longer stays during a large influx of tourists.
Look out for: Bookings are impacted by unreasonable MinLOS requirements.
MinLOS is usually activated on weekends. In this way, travelers who have booked to arrive Friday must stay until Sunday. They will not miss out on revenue or missed bookings for Saturday. Many travelers want to make the most of their vacation by booking up until Sunday. If your room has already been sold for Friday and Saturday, the higher-valued guests may not be able to book two nights, so the room could go unoccupied from Saturday to Sunday. During long weekends or major events in your area. the minimum can be bumped to 3 or even 4 nights if you want to extend your stay past the weekend.
MinLOS, in particular for independent hotels near leisure destinations and major events or attractions, is my favourite restriction.
Virginia tells us. In one case, we found that a luxury inn with 20 rooms near a wine region where we worked often only sold Saturday nights. This left the Friday and Sunday unfilled. In peak periods, we implemented a MinLOS of 2 nights on Saturdays. We saw occupancy levels increase over the weekend, ADRs increased as a result of bundled demand and revenue for the entire weekend rose. Virginia continues. Implementing MinLOS2 Saturdays also decreased housekeeping strain because it reduced turnover.
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MinLOS is an easy-to-implement, high-impact restriction which fits perfectly for small property operations. Virginia McShane is Senior Manager of Revenue Strategy Services at Lighthouse
Restriction # 2: Maximum length of stay (MaxLOS)
What is it?
MaxLOS restricts the number of days a guest may stay within a single booking. This restriction can be used right before the expected increase in demand and occupancy, such as during a major event. It is important to maximize profits without affecting these peak dates.
Set a maximum stay to save inventory and accept multiple bookings at higher rates instead of a single booking for a long-stay. It will prevent you from losing money during high demand spikes because of blocked availability.
Example: You anticipate that you will be able to sell the last four nights of a week-long stay at a higher rate later, because you are hosting a large conference in your area. Restrict stays before the event and raise rates during it. You can then sell the peak nights for higher prices because the low-rate bookings will not be able to occupy the room.
When to use: Spend sparingly on dates that are near peak times, before major events or to get discounted rates in quieter periods.
Look out for: If you don’t apply early enough, the demand isn’t high enough, or your stay is too brief, you may end up losing bookings.
MaxLOS can be a very useful tool. capture event-driven demandYou can also offer special rates during off-seasons. You can increase the rate of your rooms by limiting long-stays during certain periods. Set a MaxLOS for 3 nights just before a highly profitable week begins, and you can accept shorter bookings, at a lower rate, without blocking the better paying opportunities. This method allows you more flexibility to react to increased demand.
This restriction will only be effective if it is aligned with the demand. Use hotel demand forecasting You can use your own historical data or select a smart tool that automates restrictions Based on these statistics. Consider implementing a MaxLOS during a period of lower demand that is interrupted by an event or holiday with high security requirements. Be flexible with restrictions and re-evaluate them often as demand changes.
Restriction 3: Closed on Arrival (CTA).
What is it?
The Closed to Arrival (CTA) restriction prevents check-ins on specific high-demand dates – for example, on Saturdays during events or holiday periods – and encourages guests to arrive on adjacent “shoulder” nights with slightly lower demand. This strategy reduces the number of single-night bookings, and instead converts them to longer stays.
CTA helps you reduce the operational burden of last-minute arrivals and one-night guests by reserving peak nights for guests staying longer. This ensures that your rooms are available to guests who stay through periods of high demand, and not just those who book for one night.
Example: The following are some of the ways to get in touch with each other big music concert Your hotel will likely sell out on Saturdays. Restrict arrivals on Saturday (instead of accepting last-minute one-night bookings), so guests are encouraged to arrive on Friday – adding an extra night to their stay and boosting your revenue for the weekend.
When to use: For dates with a high number of one-night stays or limited staff capacity.
Look out for: Lack of flexibility, low demand, or unappealing deals can lead to lost bookings, unhappy customers, or unsold rooms.
CTA is a good alternative to MinLOS. It has similar results, but also some advantages. Virginia explains that a clever trick to employ is CTA Saturdays, if your guests are consistently staying for one night on the weekend. It forces guests to arrive Friday and leads to a two-night stay minimum without setting any MinLOS. It is often more effective to give a gentle nudge than to impose a restriction. Pair it with flexible cancellation or small perks like late checkout, and you’ll often see longer stays while keeping guest satisfaction high – plus happier staff with fewer turnovers to handle.”
Using them in excess or at the wrong time can cause negative effects, just as with any other stay restriction. Review your Length-of-Stay by Arrival Date and pickup trends before applying CTA or MiniLOS settings. Remember to consider your market and booking patterns when you use CTA
Virginia warns. This tactic can backfire if you attract guests who stay for multiple nights starting on Saturdays. Restrictions should increase guest flow and not block it
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Restriction 4: Closed To Departure (CTD).
What is it?
Closed to Departure (CTD), a stay restriction, prevents guests from checking-out on certain dates in order to guarantee that rooms are available during critical periods. It can help to reduce the workload for staff during busy periods such as holidays or when there are limited staff.
CTD can be used to avoid having empty bedrooms on nights of high demand. This restriction prevents guests from leaving, encouraging them to stay longer, increasing both the length of their stay and booking revenue.
Example: Guests who check out on Saturdays often leave Sunday nights vacant. You can shift departures from Saturday to Sunday or even Monday by applying a CTD. This extends your weekend occupancy and reduces turnover costs – all without having to change your pricing or create special offers.
When to use: When staffing is limited, for example during holidays, events and times of high demand.
Look out for: CTD used too broadly can lead to lost bookings, particularly when demand isn’t high.
CTD should only be used selectively, during periods of high demand or when data clearly demonstrates its advantages. Just as is recommended for CTA, consider offering incentives for extended stays, adding real value for your guests – not just your bottom line.
Restriction #5: Minimum Price (Hurdle Rate)
What is it?
A Minimum Price or Hurdle rate sets a minimum price for a night’s stay, to ensure that the room is not sold at a lower price during high demand. That way, only higher-paying guests can book those rooms – prioritizing profitability over booking volume. Price hurdles protect your RevPAR, by rejecting low value or discounted bookings during high-demand dates. This feature is particularly helpful during peak periods, major events or holidays.
Example: You’ve set a hurdle rate of €200 for New Year’s Eve – a highly popular stay date. When a guest tries to book a single night at €150, the booking system will reject it unless they add another night or select a premium room type or rate plan. It ensures that your limited inventory will be sold at the lowest possible price.
When to use: Last-minute bookings or dates that are in high demand.
Look out for: Overpricing, and missing good opportunities.
Tips and best practices to set stay restrictions
After you’ve figured out which controls to use in what situations, it’s now time to refine your approach with some best practices and final tips. These settings are important and should be carefully considered.
Virginia, our revenue expert, told us which restrictions were a must. “MinLOS and CTA at a minimum are essential,” she says. “These allow you to control the bookings during peak periods, and prevent undesirable one-night-stays that can block other opportunities. When you have a lean team, smart restrictions will reduce stress and improve profitability.
You should not overuse restrictions as they may discourage guests and reduce your visibility on OTAs. Apply them strategically to specific dates, when revenue gains will outweigh any lost bookings or reduced bookings. Don’t limit yourself when in doubt. Implementing them depends on internal and/or external factors.
- History of occupancy and demand patterns
- Actualized Prices
- Pickup and pace
- Competitor behaviour (you don’t wish to be the only one with a 1-night booking over a big event)
- Booking habits of your ideal guests
- Current occupancy
- Demand Forecasts
- Calendars of Events
Staffing costs and the flow of guests are also important factors. Virginia clarifies: It is important to consider the staffing requirements, particularly for independent hotels with lean teams. Accepting five one-night bookings is more expensive and stressful if you have only one housekeeper.
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On paper, it may sound good to maximize occupancy. But optimizing profits and service is a better idea. Virginia McShane is Senior Manager of Revenue Strategy Services at Lighthouse
Stick to these five best practices and you will get the best results.
- Ensure you have accurate data, both historical and current.
- If in doubt, do not restrict. When in doubt, don’t restrict.
- Test restrictions to ensure they work properly across all channels. This will prevent missed bookings.
- Keep a close eye on your performance, and adapt your strategy to suit.
- Transparency is key to avoiding confusion or dissatisfaction among guests.
Automated restrictions to increase revenue and save time
Stay restrictions should not be reserved for only the biggest hotels and chains. They’re a powerful tool to increase revenue and profitability, even for small hotels and B&Bs without dedicated revenue managers or commercial teams. Intelligent automation can help independent hoteliers increase revenue without adding more work to their already busy schedules.
Lighthouse’s AI platform provides you with optimal rate and restrictions recommendations based on industry-leading datasets. These suggested updates can be sent to your website and OTAs in one click or fully automatically – it’s up to you!
What are the advantages of automating your restrictions?
- Booking Value Increase
- Protect your most popular dates
- Reduce calendar gaps
- The best use of each room
- Avoid costly human mistakes
Leverage optimized restrictions, dynamic pricing, and smarter distribution to take full control of your revenue strategy – maximizing every opportunity while saving time. Lighthouse will do the heavy lifting, so you can focus your efforts on customer service.
Want to boost your profitability and improve distribution? Find out more about smart distribution in this blog Request a demo below. We are happy to guide you personally through our all in one platform for independents. No fluff – only what you actually need to stay competitive and profitable in today’s challenging hotel industry.
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