One of the most important KPIs in the hotel industry is the occupancy rate – or the number of occupied rooms compared to the total number of available rooms at your hotel. To find out your occupancy rate at any time, simply divide the number of occupied rooms by total available rooms and multiply the result by 100.
Knowing your occupancy rate allows you to know how your hotel performs during different months and seasons. Try and calculate the minimum occupancy rate that allows you to earn a profit, and when it drops below that – immediately take action to diagnose the problem and fix it!
Average Daily Rate
ADR is one of the best-known KPIs that measure your hotel’s performance. The ADR shows you the average price your guests have paid for a room on a specific day. With Average Daily Rate, you can notice trends and patterns over a given period of time, as well as generally see how well your hotel performs.
Figuring out your Average Daily Rate is extremely easy. All you need to do is divide your total revenue from all of your rooms by the number of occupied rooms. Using the ADR, you can make adjustments to pricing. For example, if your occupancy is high but the ADR is low – maybe your rooms are simply too cheap?
Total Revenue Per Available Rooms
If you need to find out what the bigger picture is when it comes to your hotel’s finances, the Total Revenue Per Available Rooms is a great KPI to calculate. This KPI shows you a bit more than ADR does, as it takes into account more than just your bookings. Take the total hotel net revenue, including all of the things like guest restaurant spendings, treatments at wellness facilities, room service, etc. and divide it by your total number of rooms.
Looking for more KPIs in the hotel industry to help you increase performance? Check out SabeeApp blog for top 10 hotel industry KPIs and more useful info for hotel managers!