Each hotel has 7 key performance metrics
Each company has its own measurements, which help companies measure their performance and improve their sales. The Hotel Industry is the same thing. Hotel metrics are an important part of keeping track of the revenue flow and understanding a hotel's performance.
Below is a list of the main measurements that can help you analyze the market performance of your hotel and develop the appropriate market strategies:
Average Daily Rate (ADR)
One of the most important and important parameters in the hotel industry is ADR or average daily rates. The average rate paid by guests per room for a certain day or for any particular period of time is simply represented. You need to divide the total room sales by the total number of rooms sold in the hotel in order to calculate it.
Revenue per Available Room (RevPAR)
RevPAR is a measurement of the efficiency and success of a hotel in the hotel industry. It is calculated by dividing the total hotel revenue by the total number of rooms available over the measured period.
Average Occupancy Rate / Occupancy (OCC)
The mean occupancy rate, which helps you understand occupancy rates over various periods of time, such as annual, monthlies, every day or during peak seasons, is another useful indicator. The number of rooms sold by the number of available rooms is calculated by dividing them.
Average Length of Stay (ALOS)
With the ALOS measurement, the time of the guests staying in your hotel is easy to identify. The calculation is based on the division by several reservations in the occupied rooms. A higher number is said to mean improved profit, given that fewer jobs are needed. A lower ALOS, on the other hand, leads to lower profit. The concept is, if a guest stays for a long time, then less work is needed. Whereas, if several guests book one night rooms for the same period, more work is needed.
Market Penetration Index (MPI)
You need to know what your hotel is doing on the local market to stay ahead of the competition. The MPI measurements can be used to compare the market share of your hotel with your competitors. It helps you know how many guests your hotel is selected in comparison to other hotels. The calculation can be made by dividing the occupancy of your hotel by market occupancy and 100. If the result exceeds 100, you'll find yourself in the market very well. Otherwise, if it is less than 100, your accommodation does not perform well and your competitors are losing many bookings.
Revenue Generated Index (RGI)
RGI is a metric that compares RevPAR in your hotel with average RevPAR on the market. Revenue generated index.
RevPAR / Total Market RevPAR for your hotel RGI formula
When divided, you are in a good market position, if the result is equal to or greater than one.
If less than one is required, strategies must be drawn up to gain a greater market share.
Gross Operating Profit per Available Room (GOP PAR)
GOP PAR is a key indicator of the success of your hotel. It allows you to know not only the most profitable part of your hotel but also the operational costs involved in generating income. The gross operating profit is calculated by splitting the rooms available.
Conclusion
You can analyze and produce a detailed performance report of your hotel using these hotel measures. Thus, you will discover the factors that affect the performance of your hotel by following these metrics and improve the results significantly.
