“It’s always preferable to avoid any form of restriction that creates friction in the market (non-refundable policies, minimum stays, restrictive payment policies, etc.). Minimum stays have more disadvantages than advantages; they significantly reduce the market share targeted, implying a decrease in visibility and therefore ranking on OTAs, which can have a negative impact on ADR and occupancy in the long run.
During periods of high demand for a particular date due to a special event, it’s the rate that becomes the main restriction, as it rises consistently with the pickup. A high rate can reduce one-night bookings (due to a very high price) and favour multiple-night stays, as the high amount for the single night with the event is absorbed by the lower rates of other nights. This naturally extends the average length of stay and optimises operational costs.
In exceptional cases with major events (New Year’s Eve, Champions League finals, or other important sports competitions), one might consider implementing a minimum stay if the rate alone, however high, is not sufficient to curb bookings. But these are truly exceptional events; in normal cases, it’s always better to avoid minimum stays. And if you want to incentivise longer stays to optimise costs, it’s better to offer enticing promotions to guests rather than obligations like minimum stays.”
