TrevPAR vs RevPAR: Both Matter but Which is Best

When looking at any hotel, regardless of size or market we always seem to focus on three main benchmarks – occupancy, average daily rate and RevPAR, with RevPAR being dubbed as king, but why?

We are always hearing questions such as is my RevPAR where it should be, are we tracking it correctly and how can we increase it without having to suffer a decrease in average daily rate – all very valid questions as RevPAR has and always will be important. RevPAR can also be seen as the foundation or building block for TrevPAR as rooms is the core product of any hotel.

TrevPAR can be considered the new boy on the block in terms of bench-marking, TrevPAR is the Total Revenue Per Available Room and takes a more meaningful look at the profitability of the entire hotel taking into account the historic and current revenues of not only the rooms department but also the food & Beverage department, Spa Department or any department that can be classified as a profit center.

In depth historical data for the rooms department is readily available and can be analysed in great depth but when looking into departments such as food & beverage as well as spa the data seems to get less and less. Often one finds that the room data is considered the most important however when looking at what other data is available the real fun starts – if we were only meant to look at rooms data why do hotels build restaurants, spas, golf courses and even large car parks – as a Revenue Manager it is your key responsibility to maximize every revenue generating department in the hotel, and in essence deliver a TrevPAR focused strategy.

Tracking data from every department can deliver some massive insights in terms of consumer behavior, pricing as well as demographics, all which can be used to deliver a more successful sales & marketing strategy.

Some of the key benefits of tracking TrevPAR include:

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