Hotel revenue management: What the acronyms mean and how to use them
When the focus shifts from delivering a world-class guest experience to delivering strong business results, the hospitality industry relies on a core set of hotel metrics. Key performance indicators (KPIs) like ADR, RevPAR, and GOPPAR help managers measure and compare their performance so they can make better-informed decisions, and ultimately, build a healthy business.
In order to gain true insight from your numbers, it’s important to understand what each metric can tell you, and perhaps more importantly, what it can’t.
To help you get started, we’ve explained how to use the most common metrics, so you can make better-informed revenue decisions.
OCC (Occupancy rate)
ADR (Average daily rate)
RevPAR (Revenue per available room)
GOPPAR (Gross operating profit per available room)
ARI (Average rate index)
MPI (Market penetration index, also known as occupancy index)
RGI (Revenue generated index)
Tracking hotel KPIs is like putting a puzzle together. When you put them all together, you build a complete picture. But if you look at one in isolation, you’re likely to get just half the story.
Regularly tracking your property’s KPIs will give you a richer understanding of your own performance, so you can efficiently manage your inventory and pricing strategies. And that means you’ll be able to build a healthy business that allows you to spend less time in the back office and more time delighting and connecting with your guests.
Simplify your hotel revenue management with Expedia Group
- Create your own competitive set and compare your performance
- Access market occupancy forecasts to better understand compression in your market
- Get price optimization alerts when your price may be too high or too low