Lead Time Restrictions for Hotels

Hotel owners are no strangers to the difficulties that can come with managing room inventory,  even in relatively calm periods. While 74% of travelers book their hotel rooms more than a month out, the 26% that book last minute can significantly interfere with your ability to plan ahead.

‍

To reduce the burden, hotels often implement lead time restrictions. It’s a useful policy for discouraging last-minute bookings, which helps with capacity planning and revenue prediction. Let’s look at how you can benefit from implementing lead time restrictions at your property.

What are Lead Time Restrictions for Hotels?

A lead time restriction refers to the minimum number of days a guest is required to book their hotel reservation in advance. It’s often applied to specific room types, promotional rates or periods of high demand.

‍

For example, if you have a specific holiday promotion, it may be beneficial to implement a lead time restriction on the discounted rate. This way guests will have to book in advance to qualify for the reduced price.

4 Benefits of Lead Time Restrictions

Lead time restrictions offer several benefits for hotel owners. By getting more control over your room inventory and pricing, you can:

 
1. Increase revenue. Guests interested in locking their booking in early will often be willing to pay higher rates for a guaranteed room.
 
2. Improve operational efficiency. Being aware of the majority of upcoming bookings allows for efficient staffing and resource allocation.
 
3. Reduce last-minute cancellations. Discourage impulsive bookings that might be more likely to cancel.
 
4. Offer promotions. You can leverage lead time restrictions to incentivize early bookings with special offers and discounts.

How to Implement Lead Time Restrictions

Before introducing lead time restrictions, it is essential to note that this practice can create friction in the guest experience. Fortunately, a bit of preparation goes a long way. Here are some tips for successfully implementing lead time restrictions:

 
• Start with market research: Market research helps you understand your target audience's booking behavior and key industry trends so you can determine what lead time restrictions are appropriate for different room types and rates.
 
• Communicate restrictions clearly: Be sure to communicate lead time restrictions clearly on your website, booking platforms and reservation channels. Inform guests about any exceptions or special offers that waive the restrictions.
 
• Offer enough flexibility: While lead time restrictions offer benefits to hoteliers, maintain enough flexibility to adapt to market fluctuations and special occasions so you can keep the guest experience at the forefront of your operations.

Improve the Guest Experience With Hospitality Technology

From research to checkout, the guest experience is top of mind for every hotel owner — which is why it’s top of mind for Canary, too. Learn more about how we’re enhancing hotel operations through our suite of products. Book a demo today.