Tracking the evolution of key performance indicators (KPIs) over time allows hoteliers to identify meaningful trends, create forecasts and budgets and assess the results of different strategies. To perform this kind of analysis, data has to be recorded within consistent time intervals and in chronological order.
Revenue per available room, or RevPAR, has historically been the most widely used metric for benchmarking performance in the hospitality industry. Its success as a key performance indicator or KPI is the result of its efficiency and simplicity.
Online travel agencies are digging their fingers further into the hotel industry. One of the latest disrupting features comes from Booking Holdings-owned Agoda and its Mix and Save option, which it hails as a win for budget-conscious travelers.
Financial performance in the hospitality industry is traditionally measured in absolute terms: actuals for the relevant KPIs are compared against their budgeted numbers and, from this assessment, action plans are developed to correct course when needed.
There are myriad acronyms in the glossary of hospitality financial analysis, but two in particular haunt hotel managers like a specter: ADR (average daily rate) and RevPAR (revenue per available room).