KPIs (key performance indicators) are key measures by which a business strategy is monitored and improved.
KPIs are the main reporting factors for managers.
KPIs can vary from industry to industry, so the hotel industry does not differ, but has certain, specific indicators. Indicators can help you identify where your business has been successful and where there is room for improvement.
In the following, we will briefly explain, in our opinion, the top 5 key indicators for monitoring:
1. Occupancy rate
Capacity occupancy is the percentage of occupancy of your capacity (rooms, apartments, beds) compared to the total number of available capacities.
Occupancy = Number of occupied units / Total number of units x 100
2. ADR (Average daily rate)
ADR (Average daily rate) is another, very useful, indicator. This measure shows us the income realized from the reserved rooms in a certain period of time.
ADR = Average Price per Night = Income from occupied rooms / Occupied rooms
3. RevPAR (Revenue per available room)
RevPAR is one of the most used and significant indicators in the revenue management process. Revenue per available room helps us understand business performance, combining facility occupancy with ADR (Average daily rate).
RevPAR = ADR x Occupancy or
RevPAR = Total Revenue from Overnight / Total Number of Available Rooms in a Given Period
4. GOPPAR (Gross operating profit per available rooms)
This indicator allows us to have an objective view of the business situation.
GOPPAR = Total Gross Operating Profit / Total Number of Rooms Available
In addition to these indicators, it is very important to monitor the costs per unit, in order to know your profitability threshold. Although many are in a business emergency this year, monitoring the indicators makes business much easier in the future.