Analytics, numbers, and key performance indicators play an important role in every business and your hotel is no different. There are hundreds of different ways to calculate, display and act on property performance. Today, data can impact your property several ways. Your daily operations and guest experience are among the top areas data can make a significant impact.
How Data Impacts Your Pricing and Distribution Strategies
Data should play an obvious role in your pricing and distribution strategies. Your key performance indicators should influence your pricing strategy and your distribution management to yield the most profitable situation. Often times, independent hoteliers know and want to keep track of their performance metrics but don’t always have the tools they need. But the good news is that there are more tools available than ever before.
New age property management systems and analytics tools make it easier to keep track of the most important performance numbers.
Most properties keep an eye on the industry’s most basic key performance indicators like occupancy rate, average daily rate, and revenue per available room.
Occupancy Rate – determines what percentage of rooms are occupied for any given period of time. How to calculate occupancy rate: occupied rooms / total available rooms
Average Daily Rate (ADR) – A simple metric used to calculate the average rate per occupied room. How to calculate ADR: total room revenue / total rooms occupied.
Revenue Per Available Room (RevPAR) – another simple metric similar to ADR, but you include your remaining inventory (rooms/beds/etc) alongside your occupied rooms. You divide total room revenue by total rooms available or multiply ADR by your occupancy percentage.
These metrics are great for getting a high-level idea of how your individual property is operating. But, in order to understand how your property is actually performing, more complex KPIs are needed. One of the best ways to determine how your property is faring is to compare it to similar competitors’ performance.
