You have probably run across advanced purchase plans when booking a hotel. They give guests an option to book & get a discount if they pay for the reservation upfront or wait and pay a little more.
Here’s an example offering $14 off if I pay in full today rather than pay at the front desk.
This does a couple of thing’s to me as a consumer
This makes me feel like I’m getting a good deal if I buy now.
It increases conversion through creating urgency because advanced purchase eventually does expire.
It allows another offering to re-target guests that didn’t book
Prevent’s cancellations saving you the headache
How Do Hotel’s Set Advanced Purchase Plan’s
OTA insight dove into how Advanced Purchase Rates are set up by most hotels. Finding that in the US 61% of the time a hotel was offering an advanced purchase rate with a 12% discount.
What Not To Do
The biggest mistake you can make with offering an advanced purchase rate is offering it too close in & within your booking window. This ends up cannibalizing reservations from guests that would have booked the higher rate anyway.
The offer also loses the sense of urgency when it is set for too long & too close to arrival.
How to Set It Up
The advanced purchase rate setup depends on the season you are setting it for & your historical booking window.
Booking Window is how far in advance people make their reservation or mathematically – Booking Window = Checkin Date – Book Date
Example: If your High season starts January 1 & has an average booking window of 120 days prior to check-in you should set the advance purchase plan to expire at least 150-180 days prior to check-in.
Retargeting & a Sense of Urgency
The advanced purchase plan can be extremely effective when paired with retargeting past guests & existing leads through email or retarget Google Ads. This can give your potential guests the extra boost they need to convert before it expires.
This can be extremely effective if you have a dynamic travel ads provider.
Examples of Vacation Rental Advanced Purchase Rates
Sanibel Vacation Rentals allows guests to save up to 20% by booking far in advance.
References
At what cost do you lock in an advance purchase rate?
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