Key Performance Indicators (or KPIs) for accommodation facilities:
- Room Revenue — income from rooms sold.
- Occupancy — a real number of rooms occupied.
- ADR (Average Daily Rate) — the average room rate per night.
- RevPAR — revenue per available room.
- Double Occupancy — the average number of guests staying in one room.
- RevPAC — revenue from each guest per day/week/month/year. Includes earnings from accommodation and other services sold.
Each metric is important in hospitality, but taken separately doesn’t reflect the whole picture. These ratios should be viewed only in dynamics, in comparison with other figures, taking into account seasonality, market situation, and other factors.
Successful hoteliers are constantly looking for tools to optimize costs and increase cash flow. The secret to revenue management success is a pricing strategy for selling the inventory, driving revenue growth. But don't limit your strategy by accommodations only — other services play a huge role in generating income.
Let's consider each indicator in more detail: what it means, how to calculate it, its role in the overall statistics, and how to influence it.