Insights from APT's Hospitality & Travel Practice

Why Are More Hotels Offering Late Checkout?

June 24th, 2013 | Posted by Dan Schreff in Uncategorized

In a recent USA Today article, APT SVP Maryam Wehe discusses the hotel trend of allowing guests to check out later in the day.  There are numerous considerations that hoteliers must make to determine whether or not offering late checkout will be profitable.

Business and leisure guests choose hotels based on a number of factors, such as location, guest experience, price, and loyalty programs.  Offering late checkouts may be one of the key selection factors for the segment of guests for whom a late checkout is critical. These guests may include business travelers who need the hotel room as a place to work or leisure travelers who wish to make the most of their last day at a resort.  However, there is some risk for hotels in offering late checkouts.

There are two reasons why offering free checkout could have a negative impact on hotel revenue. The first is that offering late checkout could, in some instances, actually cannibalize additional hotel nights. For example, a business traveler whose flight does not leave until the evening may book an extra night in order to have somewhere to work. The second challenge is regarding housekeeping schedules. If a hotel has high occupancy, housekeeping staff needs to have time to clean a sufficient number of rooms before new guests check in.

Due to the various factors involved, including the adjustment of housekeeping process, potentially cannibalizing additional room nights, and guest satisfaction, hotels should test the overall impact of a late checkout program in a subset of hotels, or with a subset of guests, prior to rolling it out broadly.  By scientifically testing the impact of late checkouts, executives can determine not only whether the program is profitable, but in which hotels and guest segments the program performs best.

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