The KPI Shift: Reimagining Revenue Management metrics.
In the dynamic realm of revenue management within the hospitality industry, there has been a significant shift in the emphasis on key performance indicators (KPIs). This evolution aims to more accurately reflect the intricate aspects of profitability and guest experience.
Here we explore the 9 key developments in KPIs that are currently transforming the landscape:
1. From RevPAR to GOPPAR.
RevPAR (Revenue per Available Room) was the industry standard, primarily measuring top-line performance.
GOPPAR (Gross Operating Profit per Available Room) emerged to provide a clearer picture of profitability by factoring in operational costs.
2. From RevPAR to TRevPAR (Total Revenue per Available Room).
Hotels are now looking at TRevPAR which includes all revenue streams like food and beverage, spa services, and other ancillary income. This helps in understanding the total revenue generated per available room, especially in the “Resorts or All-Inclusive” type of accommodation.
3. From RevPAR to NRevPAR (Net Revenue per Available Room).
With increasing distribution costs, NRevPAR adjusts RevPAR by subtracting customer acquisition costs, giving a more accurate measure of revenue after these expenses.
4. From RevPAR to RevPAG (Revenue per Available Guest).
To align revenue strategies with guest-centric approaches, RevPAG looks at the revenue generated per guest. This encourages strategies focused on enhancing guest spend and satisfaction.
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from Enzo it's all, over and out ;)
Front Office Manager @ Weekend Address. OTA Revenue Consultant @ Sysotel.ai. Over 10 years of experience in Hospitality.
5moThe points are good and can help in making strategies. But i think, TRevPAR must be calculated only with the revenue generated from the room guest and Revenue Managers must exclude the revenue from walk-in restaurant guests and non-resident banquet guest. If we calculate it with the overall f&b sale, the figures might not help in any fruitful conclusions. And any strategy made on the basis of such figures might not give desired results. And the same goes with RevPAG. Please let me know if I missed considering anything.
Průvodkyně pro hoteliéry k vědomému a profitabilnímu hotelnictví nezávisle na tom, jaké hospitality zařízení provozujete
5moThanks for very nice usefull overview. Necesary basics for all revenue managers 🙏🏻👍🏻👍🏻🍀 But if we speak about Total Revenue Management we should also mention other KPIs based on known constants like revenue per squere meters, chair or table turnover, revenue per available opening hours etc based on the revenue field of business we want to figure out. And this is just one step. Once we check our KPIs on regular base the Real analytical RM Reading work begins 🤗
Shaking up the B2B distribution landscape in the Hospitality realm. CRME
5moGreat point Markus. I’m facing this challenge frequently when I travel with my family (3 children), thats why I find more convinient opting for an apartment.
Designer | Finalist ”Sharktank” for Hotel business idea in Sweden a Sofa Bed for +3 | Designs with mechanical features for Hotelsl |
5mothe absolute easiest way to triple the extra income on the room is to open the room category; one room for two adults plus three children. today it is impossible in Sweden to book five people in one and the same room. forced to book two rooms and halve the extra income on these two rooms instead of having a sofa bed for three children and filling two rooms with 10 people. halves the price for families and you get five new guests in the restaurant in the evening and breakfast. price the rooms per number of extra beds, about 25 euros per extra bed. I have a sofa bed that is being evaluated in Scandinavia by Strawberry and Radisson and have only received positive feedback! ESS Hotel Group is selling. families with three children are screaming for this solution. 👍 Markus