GMs turning to RGI to track hotel performance

 

Monthly occupancy, ADR, RevPAR, index and ranking analysis of transient, group, contract and total business for the past 18 months. Compares subject Compares subject property data to competitive set and market scale.

What is this metric? The concept is that if a guest stays for a long period of time then it requires less labor.

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**Revenue Generating Index (RGI) or RevPAR Index (RPI):** A hotel KPI that can be used to determine whether a property is achieving its fair share of revenue compared to their competitive set. The information about the competitive set is available through third-party providers such as STR (Smith Travel Research). An RGI of above means that the hotel is achieving more than its fair share.

Same goes for the hotel industry. Hotel metrics are an important component which make it possible to keep track of the revenue stream and understand the performance of a hotel. ADR or average daily rate is one of the most critical and important metrics in the hotel industry.

It is simply the representation of average rate paid by guests per rooms for a specific day or any specific period of time. To calculate it you need to divide the total room revenue earned by the total number of rooms sold at the hotel.

RevPAR is a performance metrics used in the hotel industry to measure the profit and success of a hotel. It is calculated by dividing the total revenue of hotel divided by the total number of available rooms during the time period being measured. Another useful metric is the average occupancy rate that helps you understand the occupancy rates during different time periods e.

It is calculated by dividing the number of rooms sold by the number of available rooms. The ALOS metrics makes it easy to identify the length of stay of guests at your hotel. This is calculated by dividing the occupied rooms by a number of bookings. It is said that a higher number means an improved profit as less labor is required. Average RevPar varies widely by market.

As a hotel performance metric, it differs by market, segment and timing and is a time-based snapshot of a hotel performance. RevPAR represents the success the hotel is having at filling its rooms. Occupancy is a percentage of the available rooms occupied for a specific period. It is calculated as total paid rooms occupied divided by total available rooms. Usually, the higher the occupancy the better because the company is earning more revenue than companies with low occupancy. However, this may not always hold true if the company cuts prices to boost its occupancy.

The rate is also key to the operational side of the business to ensure proper staffing and inventory. Gross operating profit per available room. The metric measures performance across all revenue streams. Increasing demand, naturally leads to more revenues. RGI results should exceed 1 a base index otherwise hotels in a competitive set are converting more business than you.

Enhancing the RGI maximizes hotel profitability. MCPB marketing cost per booking What is this metric? These costs are subtracted from the total booking amount to get the MCPB. This metric measures ROI. It illustrates the cost of acquisition, which is a huge factor in computing gross profits. The goal is to explore each and every channel to create demand, awareness, increase booking, and thus increase revenue.

However, there needs to be the perfect mix across all channels with the best, most affordable solutions. Hotels cannot overspend on a marketing channel to simply obtain customers, there needs to be a balance between acquisition costs and profit.

Sentiment score on TripAdvisor What is this metric? It also allows you to respond in real time and publicly to customer issues. Would you like an automated dashboard for your business? Click here to watch a brief demo of the Guiding Metrics dashboard. DRR direct revenue ratio What is this metric? This metric measures the percentage of online revenue coming in directly vs expensive third-party channels.

Travel agent bookings and other third party bookings come at a high price and decrease overall profit. Website conversion rate What is this metric? This calculates the number of unique website visitors that convert into bookings.