Hospitality industry metrics are very important, and much needed these days. The hospitality industry is going to boom in the coming year. In fact, on a global level, the market is expected to grow from $3486 billion to $4132 billion in 2021. This is quite a substantial leap, and those involved in the hospitality industry will need to take advantage of this excellent opportunity for growth.
One excellent way to ensure that your own business will thrive during the hospitality boom is to track your metrics. There is a key group of hospitality industry metrics that hospitality business owners can use to improve their business results significantly. However, not all metrics are equally useful.
This guide put together a list of our six top hospitality industry metrics that provide excellent visibility into hospitality businesses.
Calculate this metric: Total rooms – Number of out-of-service rooms
This metric represents the total number of available rooms at any given point multiplied by the total number of days in the reported period. This metric is great for measuring your capacity for a specific amount of time and is essential for calculating your inventory needs.
This is the core metric behind many financial calculations that hotel owners need to generate regularly. For example, ten rooms multiplied by seven days would equal a total room availability of 70.
Calculate this metric: Paid rooms that are occupied / Rooms that are available = Occupancy Percentage
Occupancy can be defined as the percentage of the total available rooms occupied during a specific timeframe. It can be calculated as the total occupied paid rooms divided by the total available rooms in the hotel.
This rate will give you an exact percentage of all available rooms occupied during a specific period. This metric can also help you understand the volume of staff and inventory needed. In general, you’ll want to shoot for higher occupancy.
Calculate this metric: Total room revenue / Number of paid rooms that are occupied
A hotel’s ADR is designed to measure the average price paid for each room– not the projected price. This metric is perfect for measuring your hotel’s total revenue over the total amount of revenue paid for a designated period.
If you want to be able to measure your property’s financial standing and performance, this is a great metric to use. This metric is also great for comparing your business’s performance to your competitors’ performance for a specified timeframe, such as holidays.
Calculate this metric: Total revenue for a room / Total number of rooms available
Similar to ADR, this metric measures the average daily revenue generated for each available room in a hotel. This metric won’t account for the bells and whistles offered by a hotel but rather the room revenue specifically.
Your average REVPAR will vary significantly based on your market. However, as a hospitality performance metric, it can provide a time-restricted clear picture of your hotel’s overall performance.
Calculate this metric: Gross operating profit / Each available room
GOP PAR is a very important metric out of all the hospitality industry metrics. They can use it to assess the overall performance across all of your hotel’s revenue streams, from room occupancy to spas to bar tabs and more.
With this metric, one will effectively see profits across even available revenue channels and the sum of all of the hotel’s offerings– not just room occupancy.
Calculate this metric: Percentage of hotel occupancy / Percentage of market occupancy
This metric measures how an individual hotel’s occupancy can compare to a competitive set. It is designed to properly and accurately measure a hospitality business’s share of a market set. This is a valuable metric because it provides contextual insight into how your hotel is performing compared to the hospitality market.
This metric is so important because it provides a way to understand how one’s business is dominating a certain geographic area or niche, as well as the overall demand for one’s business in the marketplace. Thus, this metric can help you match increased demand to boost your revenue.
In short, these hospitality industry metrics help hoteliers and hotel owners understand the needs that they need to fulfill to keep their customers satisfied, therefore keeping the customer retention and revenue consistently soaring.
The hospitality industry metrics are very important because these metrics keep the hospitality industry afloat and organized without any hassles. However, keeping track of these hospitality industry metrics is hard if you rely on Microsoft Excel sheets and sheer trust in your employees. You need business intelligence for a more streamlined tracking of your hospitality industry metrics, among many other factors.
You need a useful tool that can help you keep these key hospitality industry metrics in check so that you can respond to the points of improvement each month. Enter DashboardFox, the one who saves the day.
What is DashboardFox, you might ask? DashboardFox is a great business intelligence tool that you can use to keep track of the hospitality industry metrics that would benefit your hospitality business and make you stand out from the competition.
As mentioned earlier, DashboardFox can help you keep track of these important hospitality industry metrics to keep your business in check. For example, it has a wide range of data visualization functions that allow you to create interactive dashboards without worrying about them regurgitating outdated numbers.
Plus, you can integrate with many data sources, including databases, MS Excel, CSV files, API endpoints, and more.
Anyone can also use DashboardFox to create and monitor these key hospitality industry metrics even though they don’t have a computer programming background.
DashboardFox is built in a way that anyone can use it, making it possible, especially for Airbnb listing owners and small hoteliers, to keep track of these hospitality industry metrics to ensure great customer service.
DashboardFox is also known to have no subscriptions in place (pay once, use it limitlessly), and its dedicated team of business intelligence staff is ready to help you once you face issues using DashboardFox in curating dashboards to keep track of this month’s key hospitality industry metrics.
If you want a useful tool that can help you organize and standardize your hospitality industry metrics without spending thousands of dollars in the process, then talk to us: schedule a meeting or book a live demo session for free. Let’s make this happen.
What do you think of these top key metrics for hospitality businesses? Let us know what you think in the comments below.