Day use can open up revenue opportunities for hoteliers if they find the right deal and get over the stigma of the practice.
GLOBAL REPORT—Booking an unused hotel room during the day can drive incremental revenue, a growing number of hotel operators have said.
Following the lead of some European brands, more hotels are seeking to maximize revenue by selling daytime hours in blocks of four hours or more and by charging fees for early check-in or late check-out. They believe they can drive profitable daytime revenue despite additional costs for expenditures like housekeeping.
Why day use?
The pitch is obvious: Rooms that are empty for a large portion of the day can be sold for a hefty percentage of the nightly rate.
“If we have rooms available, it is in our interest to use them during the day,” said Jan Kalanda, VP of development at Rockstar Hospitality Group, which manages the Z NYC Hotel in Long Island City, New York. “It’s revenue we would not have had.”
Robert Gaeta, GM of the Best Western Plus Hospitality House in New York, said day use “has been a great new source of incremental income for our hotel. The demographic of the people staying is overwhelmingly high end and desirable.”
One brand that has made daytime revenue generation a priority is Yotel. The European chain—which sells high-design, moderate-rate properties with small, efficient rooms—makes it a priority to use those rooms during the day. That is especially true at airport properties.
Jo Berrington, VP of brand, said, “Our YotelAir properties are unique in that they can be booked for four hours or longer, making them ideal for weary air travelers.”
YotelAir properties are located within the terminals of airports, including a new location in Paris at Charles de Gaulle Terminal 2E.
“They are ideal for travelers catching extremely early flights, but also a great escape and sleeping haven for those who have a planned or unexpected layover,” she said.
The airport hotels, Berrington said, are actually designed for shorter stays. The Paris hotel, she said, “is designed for guests who are on the go with easy charging stations, a food and travel supply vending wall and even intuitive cabin lighting to relax jetlagged guests.
“Due to the in-terminal nature of our YotelAir properties,” she said, “they tend to experience more rolling demand as guests are constantly arriving and departing for various flights. Our peak time for arrivals in our airside locations is from 5 a.m. in the morning. Our newest YotelAir in Paris, CDG airport, features 80 cabins, including some ‘shower-only’ cabins for a quick refresh. Checking cabin availability is easy, with our responsive website and booking engine.”
Early check-in, late check-out
Once they are prepared to charge for daytime use, hoteliers say it becomes easier to charge for early check-in. Gaeta said day use has allowed the hotel to justify charging for early check-in of evening guests.
“We have found that overnight guests who want to come in early because they have kids, came in on a redeye or have an elderly person traveling with them are willing to pay for the additional time,” he said. “Now we can more easily justify charging for that privilege.”
The Yotel New York charges for early check-in and late departures, which can be booked through its app so guests don’t have to call down to a traditional front desk and ask for an extension, Berrington said.
“We make sure that any charges are excellent value for money and they are flexible depending on the number of extra hours the guests need,” she said.
The standard check-in time in New York is any time after 3 p.m. and check-out is any time before 11 a.m., Berrington said. Guests can pay to have an early check-in or late departure.
“We aim to have as many cabins (rooms) available as possible and having cabin crew (housekeeping) on site throughout the day help us to deliver this,” she said. “If for whatever reason we cannot accommodate a request immediately, our Yobot (luggage storing robot) service can store guest’s luggage free of charge until their cabin is available.”
Some Las Vegas hotels are taking advantage of the 24-hour nature of that destination to maximize room revenues. At Caesar’s Palace, the standard payment for check-in before 3 p.m. is $30 plus tax; and hotel suites and villas can be booked for meetings via the hotel’s Anthology program, which includes VIP amenities. MGM Resorts International in Las Vegas offers guest check-in as early as 10 a.m. for a fee of $15 to $40, depending on the property.
Who are the day users?
“People use the rooms to clean up, or if they have a layover and don’t want to stay at the airport or want to have a meeting and don’t want to meet in the lobby,” Kalanda said. “Sometimes we rent a room for a photo shoot because we have nice views of the Manhattan skyline.”
Richard Yeager, director of sales and marketing at Tryp by Wyndham Times Square South, was originally leery of day use because of the potential for illicit activities but said, “That has not been the case at all. We get mostly younger travelers, millennials who need to freshen up—or have a brief meeting.”
“The demographic of the people staying is overwhelmingly high end and desirable,” Gaeta said. “Day use has also allowed our hotel to justify charging for early check-in of our evening guests.”
Holding housekeeping expenses in check
Berrington said daytime use can result in occupancy rates as high as 240%, which requires having housekeeping at hand.
“We have cabin crew (housekeeping) on duty 24/7 to ensure the quick and efficient turnaround of cabins; they have been likened to a Formula one pit crew,” she said. “This is not only relevant to our airport hotels, in Yotel New York, guests can check-in early or depart late to suit their own personal schedules. We therefore also have cabin crew on hand throughout the day to ensure we can deliver this service to our guests.”
At Tryp’s Times Square location, the property runs at high occupancy all year round, Yeager said.
“Early arrivals for day use are dependent on vacant/clean rooms as the day begins,” he said. “We have an early housekeeper as well as a late shift housekeeper to make up rooms as they vacate. Generally speaking, by 10 a.m. we have a few rooms made up because it’s always to our benefit to have rooms available. Guests use the rooms for four to six hours.”