This indicator is for measuring the average length of stay of guests (e.g. in days). This is calculated by dividing the total number of booked days by the total number of guests, in a specific time period.
Hotel managers may use this tool to create profiles of their customers, for target segmentation, marketing, sales promotions etc.
However, the KPI by itself does not offer a very accurate figure, as it only looks at the overall average. A more specific customer profile would be able to provide a more measurable KPI, valuable for strategic decisions.
For instance, the managers may benefit from looking at the average stay of young couples (20-30 years old) against middle age families (30-50 years old) or retired groups (60-70 years old). If their target market is families and retired groups, they may choose to create packages and sales promotion based on the Average Length of Stay KPI.
Formula:
Total number of booked days / Total number of hotel guests
KPI Units: Days
KPI Time Frame: Update monthly or quarterly
Example:
Hotel average length of stay of guests over a month period:
- 2000 booked days/ 250 guests = 8 days ; Average length of stay – 8 days
Further KPIs (as mentioned above) can look at type of guests, example young couples (20-30). Let’s take for example that 700 days have been booked by 50 young couples (100 guests)
- 700/100 = 7 days length of stay per young couple
Let’s assume the remaining 1300 days have been booked by middle age families (150 guests)
- 1300/150 = 8.6 days per individual (of middle age family)
