Learn how to measure your hotel's success in the best way
Learn how to measure your hotel’s success in the best way and what you should think about when measuring RevPAR.
How do I measure hotel success?
Revenue management software is designed to find your hotel’s optimal business mix, balancing occupancy and ADR to ultimately drive revenue per available room
Perhaps the most important metric, RevPAR Index measures a hotel’s revenue versus its defined competitors in the market. If every hotel in the market sees revenue increases, RevPAR Index will show a hotel how its revenue has changed in comparison with the comp set.
What should I think about when measuring RevPAR?
To determine the effect that an RMS has on RevPAR, it is crucial to take the development of the local market into consideration, the RevPAR Index. If the RevPAR of the local market grows by 10% and the RevPAR of a specific hotel in that market also grows by 10%, then the effects of using an RMS would be zero, even though the RevPAR increased.
Another important factor is seasonality. Compared to its competitors, each hotel has its strong and weak seasons. Hence, it is important to compare with the same period from the previous year.
A third essential element is to compensate for those rooms that were out of order, i.e., not available to the customers. If a hotel has 100 rooms but 20 of those are not available because they are out of order, then the RevPAR should be calculated on 80 rooms, not 100 rooms.
Case studies done on Atomize users show an average see year-over-year RevPAR Index growth between 15-20 %.