Question

Which of the following might be increased by establishing a minimum length of stay (MLOS) at a hotel? A) ADR (average daily rate) B) Occupancy rate C) Rack rate D) RevPAR (revenue per available room)

Answer 1

Establishing a minimum length of stay at a hotel can potentially increase the ADR, Rack rate, and RevPAR.

Step-by-step explanation:

Establishing a minimum length of stay (MLOS) at a hotel can potentially increase the ADR (average daily rate), the Rack rate, and the RevPAR (revenue per available room).

When a hotel sets a minimum length of stay, it allows them to charge higher rates for longer stays, resulting in an increase in the average daily rate. Additionally, the rack rate (the standard rate for a room) may also increase as the hotel sets a minimum length of stay. Finally, by increasing the average daily rate and the rack rate, the hotel's revenue per available room (RevPAR) is likely to increase as well.

Answer 2

Establishing a Minimum Length of Stay (MLOS) at a hotel is most likely to increase the Average Daily Rate (ADR)-(A) because it ensures that rooms are booked for longer periods at stable rates, potentially reducing the number of discounts and prioritizing guests who are willing to stay longer.

Step-by-step explanation:

• By implementing a Minimum Length of Stay (MLOS) policy at a hotel, the most likely increase would be in the ADR (Average Daily Rate).
• This happens because MLOS restricts shorter stays, thus prioritizing guests who are willing to pay for longer periods.
• This could potentially reduce the number of discounts given for shorter stays, and higher paying guests could offset the lower occupancy, ideally resulting in an elevated ADR.

• While Occupancy Rate might decrease due to a potentially smaller number of guests meeting the MLOS criteria, the higher revenue from extended stays could help to keep the overall revenue stable or even increase it.
• Rack Rate generally refers to the standard rate before any discounts, and it is not directly affected by MLOS policies.
• However, the RevPAR (Revenue Per Available Room) might see an increase if the ADR increases sufficiently to offset any potential drops in occupancy.