Amateur innkeepers utilization of minimum length stay restrictions

Abstract

Purpose

The purpose of this paper is to determine how much the lodging shared economy (LSE) utilizes minimum length of stay (MLOS) controls to maximize revenue and reduce housekeeping expense, since cleaning between guest visits represents a substantial variable cost for each guest’s stay. Hosts in the LSE are becoming increasingly perceptive in maximizing revenues.

Design/methodology/approach

Daily data for one year were collected for Vacation Rental by Owner properties in Hilton Head Island, SC and Orlando, FL. The collected data include daily vacancies for two different lengths of stay. Linear regression was used to explore the relationship between relative demand and vacancy length of stay differences.

Findings

During high-demand periods, there were few differences between the availability of short-term and longer-term reservation vacancies, which indicated hosts were not encouraging guests to stay longer during each visit. These results reveal differences in vacancies for three-night vs six-night reservations. A host can generate more revenue and decrease expenses by maximizing booked nights per visit.

Research limitations/implications

Due to confidentiality issues, this study does not capture vacation bookings but instead captures vacancies. In addition, Average Daily Rate was not utilized in this study.

Practical implications

LSE hosts can maximize revenues using MLOS controls. Minimizing housekeeping costs boosts a host’s profitability.

Originality/value

Although this research has been conducted for hotel MLOS, there is a gap in the literature regarding LSE hosts’ use of MLOS.

Citation

Kreeger, J.C. and Smith, S. (2017), "Amateur innkeepers utilization of minimum length stay restrictions", International Journal of Contemporary Hospitality Management, Vol. 29 No. 9, pp. 2483-2496. https://doi.org/10.1108/IJCHM-09-2016-0502