Business Intelligence, Hospitality

Is a day room use for hotels a feasible business opportunity?

I once attempted to rent a local hotel room for a half-day while I waited for a work colleague. I can never forget the puzzled laugh of the receptionist following my polite inquiry. Sure, the hotel policy stated that this was an available option, but she revealed to me in confidence that her line-manager almost expressly forbade it. Unless you were the creme-de-la-creme of the society, then it was no problem. At this point, you would have to pay 60% of the normal nightly rate for only a maximum of 8 hours. But of course, such ones could easily pay for a full-day reservation without scruples.

Many developed societies have adopted the half-day or daily use for hotel rooms. At checkout, you can opt to pay for 6 or 12 hours instead of paying for the entire day. This has its advantages, but there are also accompanying disadvantages. Let’s look at some of them.

 

Advantages of the day-room usage
  1. Maximising revenue: Rooms that would otherwise remain vacant during daytime hours can now generate income. Such guests may be inclined to avail themselves of additional services offered by the hotel, such as dining, spa treatments, or recreational facilities which presents opportunities for upselling and boosting revenue. 
  2. Increased occupancy rates: Travellers on business trips can benefit from a convenient space to rest, freshen up, or work for a few hours without the commitment of an overnight stay. This increases the occupancy rates as you have provided a flexible and more appealing option for many. 

 

Disadvantages of the day-room usage
  1. Operational challenges: Maintaining cleanliness standards is the biggest challenge with day-rooms. For instance, if the checkout time for day-room guests is 4pm, it might be difficult for housekeeping to turnover the room in time for overnight guests. Other challenges could be understaffing and paradoxically, a reduction of revenue.
  2. Risk of misuse: There is a risk that day rooms may be misused for purposes such as unauthorised gatherings or illicit activities. Or as Hollywood would have us believe, you could be aiding and abetting a stake-out for the grandest heist in history. Stringent security measures will need to be put in place to avoid such occurrences.

 

The verdict: It seems like a tie, but the cons outweigh the pros, especially in developing countries. Day-room usage can significantly strain resources and increase overhead costs for hotels. If the operational burden outweighs the revenue generated, it can undermine profitability. In addition, if the influx of day guests results in overcrowded common areas, longer wait times for services, or noise disturbances, it could tarnish the hotel’s reputation. There is also a genuine risk to the safety and security of guests which could result in legal liabilities. 

N.B: This is not business advice, and it is ultimately up to the business owner to make the best choice, albeit one that is low-risk.

 

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