There’s a lot more to hospitality than just booking reservations, cleaning rooms, and providing great guest service. At the end of the day, a hotel is a business and running a business requires General Managers to understand hotel revenue, bottom line, ROI, and so much more.
Key metrics, or key performance indicators, help hotel teams keep track of how well they’re doing by allowing them to set benchmarks for their performance. This ranges from how many rooms are full, to how efficiently they’re running a property. Here are the hotel metrics we’ll cover in our Ultimate Guide to Hospitality Metrics.
- OCCUPANCY – Occupancy is one of the most important indicators of success: the average occupancy rate (OCC) measures how “full” a hotel is, at any given time.
- REVPAR: REVENUE PER AVAILABLE ROOM – This metric reflects a property’s ability to fill rooms at a consistent rate.
- AVERAGE DAILY RATE – Sometimes referred to as “heads in beds,” the Average Daily Rate (ADR) indicates the average revenue generated per occupied room on a given day. It is a key indicator of performance in the industry and can fluctuate due to seasonal trends.
- LOS: LENGTH OF STAY – Length of stay is how many nights a guest stays at the hotel—from arrival to departure. Depending on the season, or between weeks and weekends, it can fluctuate quite a bit.
- MPI: MARKET PENETRATION INDEX – Measures a hotel’s OCC in comparison to an aggregated group of hotels. This metric can be helpful in analyzing how one property is performing in relation to competition and the market at large.
- GOP PAR: GROSS OPERATING PROFIT PER AVAILABLE ROOM – Is a good metric in the industry to get an idea of a property’s financial health. Also referred to as the “bottom line,” it can give hotel owners a good idea of how valuable their hotel is.
- CPOR: COST PER OCCUPIED ROOM – Cost per occupied room is the average cost of preparing a hotel room for guests: from labor, to housekeeping, to amenities, there are a lot of expenses associated with providing well-equipped rooms for guests.
- GUEST SATISFACTION – Measuring quality is just as important as measuring quantity. Customer satisfaction is the key to success in an industry like hospitality: satisfied guests will be coming back and spreading the word, while unsatisfied guests will not.
We’ve just scratched the surface of each of these key hotel metrics. If you’re looking to take a deeper dive, learn how you can calculate and apply these metrics to your property’s overall strategy, download our guide below.