Are you a vacation rental owner or property manager looking to maximize your revenue? One strategy that can help achieve this goal is implementing Minimum Stay Restrictions. You can attract longer stays, reduce the workload of turnovers, and improve your rental’s overall performance by optimizing your occupancy. In this blog, we will explore the benefits of Minimum Stay Restrictions. Also, how you can effectively implement them to increase your rental’s revenue and success.
What is Minimum Stay Restriction?
Vacation rental owners and property managers commonly use minimum stay restrictions or minimum night restrictions to manage their bookings for different seasons and booking windows. For example, they optimize their occupancy during high demand dates by setting a longer minimum night restriction when people will be willing to book for a longer period. It is a feature that helps property managers optimize their occupancy.
Property Managers usually extend minimum stay during high-demand seasons. This helps them make up for low occupancy during low-demand seasons. During a week-long festival in the vicinity, property managers would likely mandate booking for a minimum period of 7 days. It is because, during that period, guests are more likely to book their rental for the entire week.
Keeping a minimum stay restriction or minimum night restriction of 7 days will prevent orphan days during the week. Also, property managers want to avoid their rental to be left unoccupied during high-demand days. If they don’t mandate a 7-day stay restriction then their rental can get booked for 4 days during a time when the demand is for 7 days causing them to deal with an empty rental for the remaining 3 days.
Since minimum night restrictions is an advanced feature, it is advisable that you first gain good knowledge of your market and have a clear understanding of what kind of bookings you want to get before using the Minimum Stay Restrictions.
Setting a longer minimum night restriction during a market trend for shorter stays may seem scary, but if you anticipate your guests’ needs and leverage market opportunities, it can be profitable.
Getting Started with Minimum Stay Restrictions for Your Vacation Rental
Minimum night restrictions are used to optimize your vacation rental’s occupancy rate. It is important to understand when to mandate longer stays and when to let your guests decide if they prefer a longer length of stay by not setting any restrictions.
Now, the guests require more flexibility, and they go to service providers who offer them that flexibility. Complicated policies and restrictions like an extended minimum stay requirements are usually an inconvenience that they don’t prefer. So, they move on to vacation rentals that give them the least hassle and most services.
Also, if you don’t have a solid Minimum Stay Restrictions strategy in place, your online visibility is directly affected. If a guest is searching for vacation rentals for a period not aligned with your stay restrictions, your property will be filtered out by booking channels and cost you valuable direct bookings in the long run.
No minimum night restrictions lead to more short bookings, increasing calendar gaps and maintenance costs, as well as the risk of parties and complaints. While charging Airbnb cleaning fee can cover costs, it still requires effort to maintain the rental, which is undesirable for hosts.
Therefore, it is wise to have minimum night restrictions but only after knowing the ongoing trends in the market. How do you do that? You get yourself a subscription to software like PriceLabs, where you can completely customize your strategy for different demand days and optimize your occupancy. Continue reading till the end to understand how PriceLabs helps you understand the market trends in your neighborhood. Start with a one-month free subscription, and check out our pricing plans – you’ll be hooked.
Continue reading to know different minimum stay strategies and how you can customize them in PriceLabs.
Minimum Stay Restriction Strategies
To optimize occupancy, vacation rental owners and property managers use various strategies to set their Minimum Stay Restrictions. It’s important to note that these restrictions cannot remain constant, and one must regularly check market trends and adjust accordingly.
Below are a few common strategies:
1. Short Minimum Stays (For 3 to 7 days):
If you have a bigger property like a 3-bedroom apartment or villa, then you should consider keeping a comparatively longer minimum stay of 3 to 7 days than a 2-day minimum because people usually book bigger properties for more than 2 days. Also, by mandating a comparatively longer minimum stay, you can make sure you are not spending too much on the upkeep of the property, which tends to be higher for bigger listings. This would also discourage people from booking your property for parties and one-day events.
Another reason why you might consider keeping a 3-7 day minimum stay is when you are situated in a market that predominantly has longer minimum stays than very short 1-2 day minimum. For example, markets like Florida and the outer banks of North Carolina predominantly have a seven-night minimum stay. In this case, you can allow a comparatively lower minimum stay, for instance, of five days. By allowing greater flexibility, you will be in a position to charge more for your properties.
Minimum stays that are of 3-7 days are also used in seasonal markets like beach towns, mountains, etc to make up for the low bookings recorded during low-demand seasons.
In other instances, some property managers choose to opt for the strategy of mandating lengths of stay that are longer than 2 days at lower rates. In that case, they mandate a comparatively longer length of stay but at a comparatively lower rate than the market to attract more bookings.
2. Short Minimum Stays (For 1 to 2 days):
Properties situated in urban markets usually prefer to keep their Minimum Stay Restrictions limited to a 1 day period. This is especially common for studio apartments and 1 bedroom apartments. In general, a 1-day minimum stay period is used for weekdays. It is because urban markets are not seasonal markets and seldom get bookings longer than a day or two that are usually prevalent in seasonal markets during high-demand seasons.
These properties use a 2-day minimum stay during weekends. Bigger listings and properties in seasonal markets choose a shorter minimum stay of 2 days during low-demand season.
A shorter minimum stay is usually preferred by:
- Business travelers
- Travelers looking for a short break
- Groups looking for a place to party
- People looking for a staycation or a weekend getaway
3. Mid-Term Stay (30 days+)
Property managers and vacation rental owners sometimes decrease their ADR to encourage mid-length stays. This is to increase their occupancy during low-demand seasons. In that case, they make it mandatory to book their properties for a minimum of 30 days.
Mid-Term Stays are also used by property owners in markets where there are short-term rental regulations. For example, in Charleston, the government allows a listing to operate as a short-term rental for only 144 days a year. For the rest of the time, it is mandatory for them to take bookings for at least 30 days. Managers choose to make their properties available for short-term rental during high-demand season. They set a minimum stay restriction of 30 days during low-demand season.
1. Orphan Day Bookings
In addition to understanding the ideal minimum night restriction, you need to strategize for days when there are gaps in your calendar. These gaps are called Orphan Gaps.
In definition, Orphan days are the days between two bookings that are shorter than the minimum stay mandated by the property manager. Due to this, they will be unbookable because they don’t meet the requirement for minimum night restrictions. You can make the one or two nights gap or orphan days bookable. Set separate minimum night settings for these orphan days,
2. Adjacent Day Bookings
Another factor you need to account for in your minimum stay strategy are Adjacent Days. Adjacent day settings allow you to take shorter bookings when they don’t create a gap night. It is done by adjusting the minimum stay requirement either immediately before or immediately after a booking/calendar block.
You have two options:
- Adjacent bookings BEFORE an existing booking/block: These settings are useful to specify what kind of bookings you’re comfortable taking before another existing booking/blocked date. For example, a 2-night booking is okay to take if it starts two nights before an existing unavailable date (thus resulting in no gap days).
- Adjacent bookings AFTER an existing booking/block: These settings are restricted to the day after an existing booking – you can specify if you are okay with a shorter booking after an existing reservation as long as it doesn’t create a gap.
3. Last-Minute Bookings
Guests are most likely to book for shorter durations when booking at the last minute. Let me give you an example to better understand this setting. In the image used below, we have set the next seven days to have a 1-night minimum requirement for weekdays and 2-nights for weekends. This can greatly increase the chances of getting last-minute bookings that tend to be shorter. You can specify up to 3 last-minute min-night rules.
4. Far-Out Bookings
When guests are booking vacation rentals quite in advance, they usually plan to stay for a longer period. This is useful for filling up your calendar with longer bookings far out and allows a regular 2 or the 3-night minimum in the main booking window (depending on your location).
Using this strategy, you can specify a minimum night’s length and specify how many days far out this setting should apply. For example, if your guest is booking your property 6 months in advance, they must book the property for at least 7 days.
How do you set Minimum Stay Restrictions on PriceLabs?
At PriceLabs, we understand the importance of setting your strategy along with the suggested prices and restrictions. Therefore, our various customizations allow you to have complete control over your pricing and operational strategy. You also get the benefit of pricing automation so that you can focus on getting ahead of the market.
With PriceLabs, you can set up rules for applying default minimum night requirements and custom minimum night rules for last-minute bookings, orphan-day / gap-day bookings, and far-out bookings.
We introduced Minimum Stay Restrictions in 2017 to help you increase your revenue and reduce operational costs. The Length of Stay data from Market Dashboards and Portfolio Analytics can be used to get an approximate idea of what these settings should look like for your listings.
MinStay Recommendation Engine
But we know that it is not easy to figure out the minimum stay strategy. Hence, we have added intelligence to these customizations to make managing your rentals easier.
Our Minstay Recommendation Engine is a data-driven tool that provides dynamic minimum night recommendations for vacation rental properties. It leverages historical data, market trends, and other relevant factors to suggest the optimal minimum length of stay for each date. The engine analyzes factors such as booking patterns and seasonal demand to make intelligent recommendations. By using a minstay recommendation engine, property owners and managers can optimize their revenue. It is done by setting appropriate minimum night requirements that align with market demand and maximize occupancy. You might want to adjust your Minimum Stay Restrictions to maximize revenue and for some operational reasons.
You can easily edit these recommendations so that it fits in with your unique requirements.
Let’s talk about how you can set Minimum Stay Restrictions in PriceLabs.
1. Go to the “Edit” button on the Customizations panel in the Pricing Dashboard
2. Next, head to the “Stay Restrictions” tab.
3. Once you toggle on the “Minimum Stay Update” option, a larger menu will open up.
You will see six options available to you. Let’s go through each of them:
Select a minimum-stay profile
There are two sub-options available here:
- If you have an appropriate min-stay profile saved on your account, you can use that profile instead of entering all the fields again. This option is more useful for those who already have profiles made on PriceLabs. If you are new, use the second option.
- With this option, you can enter custom values.
Default Min Stay Rule
This is the default setting. It is applied to all dates that don’t have one of the special rules that can be applied as an exception.
Minimum Stay for Last Minute Bookings
This option allows you to set Minimum Stay Restrictions when the guest is booking your rental at the last minute.
Minimum Stay for Far-Out Bookings
Minimum Stay for Far-Out bookings allows you to specify the minimum night’s length and how far out this should be active. You can specify up to 3 last min-night rules (you can anticipate all the likely scenarios and have rules or that, how cool is that!).
Minimum Stay for Orphan Bookings
You get few different options in the drop-down menu (each of these is activated only if the min-stay setting needs to be reduced to accommodate a booking):
- Length of Gap: For any gap of the length specified in the box (in the example above, gaps between 1 and 4 days), we will set the minimum to be the same as the length of the gap. If you are using a value-based default minimum stay, this will change the daily rates of the orphan period to meet your required booking value.
- (Length of Gap – 1): For any gap of the length specified in the box (in the example above, gaps between 1 and 4 days), we will set the minimum stay to be one night shorter than the length of the gap. This is useful because it might be hard to fill a 4-day gap with an exactly 4-night booking, but somewhat easier to find a 3-night booking, although it will leave a 1-day gap open (giving you enough time to clean and prepare the rental for the next guest).
Note that 1-day gaps will stay at a 1-night minimum. If you are using a valued-based default Minimum Stay Restrictions, then the daily rates for orphan periods are adjusted so that the shortest stay allowed meets the required minimum booking value.
Minimum Stay for Adjacent Bookings
These settings allow you to take shorter bookings when they don’t create a gap night. Note that these settings rely on the start date that is used for min-stay restrictions.
Now, we’ll talk about how you can use PriceLabs Market Dashboards to understand how guests book according to the lead time. This will help you decide how many night restrictions you want to apply according to the booking window.
The Length of Stay and Lead Time Section
The Length of Stay by Stay Date graph in Market Dashboards shows the typical duration of bookings made for any given date in the past number of days selected. You can hover over the graph to see details on stay length and average nightly rate for a specific date. The chart below shows that most of the bookings made were for short-duration stays (less than seven days), with the most popular stay length being 3-4 days.
Using the above graph as an example of minimum stay restrictions patterns in a specific market, you can see that the most common length of stay is 3-4 days and most of the bookings are made 1-2 months in advance. So, you can set a minimum night restriction for 3 days for the bookings made 60 days in advance.
The Length of Stay and Booking Window Trends
This graph is more commonly used to see the booking trends for future dates. In this graph, you can see a significant minimum for those dates when people usually book for 7-14 days.
Similarly, you can track the booking trends for all dates. You can identify which dates are getting higher bookings, and adjust your minimum night restrictions accordingly.
Now you know why we call Minimum Nights Restrictions an “’advanced setting”. Reading and understanding all this must be exhausting. However, if you have come this far, then you know everything you need to know about minimum night restrictions.
- You can now set the right settings for orphan days, adjacent days, far-out bookings, and last-minute bookings.
- The different length of stay helps you prevent unwanted group parties and short-term guests from booking your rental during the high-demand season.
- It can also help you increase your occupancy during low-demand seasons. You can adjust the length of stay requirements to cater to shorter stays.
- You can also get mid-term bookings by increasing the stay requirements to 30 days.
Remember, setting these customizations is not a one-time thing. You need to stay on top of booking trends to be able to use this strategy beneficially.