What is Lead Time?
Lead Time = Days between booking date and check-in date
If a guest books on January 1st for a January 15th stay, the lead time is 14 days.
Lead Time vs Booking Window
| Term | Meaning | Example |
|---|---|---|
| Lead Time | Days in advance a booking is made | "This booking has 14-day lead time" |
| Booking Window | How far ahead your hotel accepts bookings | "Our booking window is 365 days" |
| Average Lead Time | Mean lead time across all bookings | "Our average lead time is 21 days" |
Why Lead Time Matters
Real-World Example
Scenario: Your hotel has 60% occupancy for Saturday, 5 days away.
If your average lead time is 3 days: Don't panic! Most bookings come last minute. You'll likely fill up.
If your average lead time is 21 days: Worry! At 5 days out, you should already be at 80%+. Consider dropping rates.
Typical Lead Times by Segment
| Guest Segment | Typical Lead Time |
|---|---|
| Walk-in / Same-day | 0 days |
| Last-minute leisure | 1-3 days |
| Domestic business travel | 3-7 days |
| Weekend getaway | 7-14 days |
| Planned vacation | 30-60 days |
| Group/Wedding bookings | 60-180 days |
| International tourists | 45-90 days |
Where Lead Time Data is Used
| Use Case | How It Helps |
|---|---|
| Pricing Strategy | Set higher rates for longer lead times (early bookers pay more) |
| Forecasting | Predict final occupancy based on current pace |
| Cancellation Policy | Stricter policies for far-out bookings |
| Promotions | Run last-minute deals if lead time is short |
| OTA Strategy | Different channels have different lead times |
Lead Time Pricing Strategy
Best Practice: Charge more for advance bookings, less for last-minute. Why? Early bookers are committed and less price-sensitive. Last-minute bookers have fewer options.
Example: Tiered Pricing by Lead Time
| Lead Time | Rate | Strategy |
|---|---|---|
| 60+ days | ₹5,000 | Early bird premium |
| 30-59 days | ₹4,500 | Standard rate |
| 7-29 days | ₹4,000 | Fill rooms |
| 0-6 days | ₹3,500 | Last-minute discount |
Note: This is just one strategy. Some hotels do the opposite - charge more for last-minute during high demand!
How to Track Lead Time
- PMS Reports: Most property management systems track booking date vs arrival date
- OTA Analytics: Each OTA provides lead time data in their extranet
- Excel/Sheets: Simple formula: =Arrival Date - Booking Date
- Revenue Management Systems: Automated tracking and alerts
Booking Window Best Practices
- Open 365 days out: Standard for most hotels. Don't miss early planners.
- Group bookings: Accept 18-24 months out for weddings and large events.
- Update rates: Keep at least 6 months of future rates loaded.
- Close old rates: Don't leave 2-year-old rates open for next year!
Action Item: Check your PMS/OTA extranet right now. Are rates loaded for the next 6 months? Many hotels lose bookings because their booking window isn't properly set up.