Hotel KPIs- Track & Improve Hotel Performance Seamlessly

What are Hotel KPIs and Why They Matter?

The global hotel industry is getting more competitive in recent years, driven by the influx of newer players, social media marketing and OTT dominance, and increasing personalisation. In this context, there are a few metrics that the industry relies on to track performance and consistently improve across the board. These are known as hotel KPIs, which help track performance across multiple operational areas or the entire property. They ensure full visibility into how the business is doing along with its overall sustainability.

These KPIs enable thorough analysis and development of improvements to improve property performance. To define a KPI, it is a measurable value that indicates how any hotel brand performs in relation to a set of specific objectives like average room rates and others. It covers diverse business aspects, right from operations and financial management to marketing, reception and more. This also boosts decision-making for hotel owners, while helping them learn more about their strengths and weaknesses alongside. For example, a higher occupancy rate on a consistent basis may be an indicator that marketing strategies are working more effectively, while a lower customer satisfaction store may indicate possible issues.

Top KPIs to Track In the Hotel Industry

There are several hotel industry KPIs that are relevant, although there is no one-size-fits-all solution. Hotels have to choose KPIs that they find relevant and utilise the same towards boosting eventual performance. Here is a closer look at some of the standard metrics that hotels use.

Average daily rate (ADR) - It measures the average rate per occupied room. You can thus analyse the revenue collections for all your occupied rooms on a daily basis. It also indicates financial performance of the hotel, while facilitating marketing and pricing forecasting. The formula is- room revenue/number of rooms sold (occupied).
RevPAR- One of the most important hotel performance metrics, it indicates revenue per available room. A high RevPAR usually indicates good occupancy rates and ADR. The formula is average daily rate x occupancy rate. Alternatively, it can be total revenue / total number of rooms that are available.
ALOS- This metric stands for average length of stay. You can divide the total occupied rooms by the booking count. A higher ALOS score is always a good indicator of higher spends, while you can use this data to make better pricing decisions (increasing room rates for short stays for lower scores and offering deals for longer stays) too.
Occupancy Rate- One of the best hotel metrics today, it identifies results on an annual, weekly, monthly or daily basis. You have to calculate the total room count, empty rooms and those which are booked. This KPI is useful for assessing daily performance. The formula is total number of occupied rooms/total number of available rooms x 100.
GOPPAR- The gross operating profit per available room is also a crucial metric. It tracks gross operating profit for a specific length of time, in relation to the total number of rooms available. Gross operating profit is shown on hotel financial statements and indicates the profit remaining after the cost of goods and other expenditure like payroll. You can use this key metric to identify profitability changes and execute measures for either cross-selling/cost-cutting to scale up revenues and lower expenditure.
Customer Satisfaction Score (CSAT) - This KPI also helps track hotel performance in terms of overall guest satisfaction. It also helps find weaknesses and areas for improvement. The formula is total number of responses to surveys/number of happy customers x 100.
NPS (Net Promoter Score) - Track the likelihood of guests recommending your property to other people. A higher score indicates good brand loyalty on your part.
Direct Booking Ratio- It tracks the percentage of bookings via your website as opposed to third-party platforms.
TRevPAR- Total revenue per available room is sometimes a more extensive metric that takes all hotel revenue streams into account.
Booking Lead Time- It helps with strategic forecasting and planning, since the further ahead your bookings are, the higher certainty of revenues. It is calculated by counting the days between reservations and arrivals.
Booking Pace- Track business day bookings, seeing how many new ones are there, cancellations, etc. It helps you understand the flow of bookings on a day-to-day basis.
MPI (Market Penetration Index) - This compares the performance of your hotel to your industry rivals. Scores below 100 are usually indicators of below-market-average performance.

Benefits of Tracking Hotel KPIs Regularly

Tracking hotel KPIs regularly comes with its own set of advantages for owners/brands. They include:

Discovering strengths or what’s working for the hotel
Identifying weaknesses or areas of improvement
Optimise performance and benchmark the same against rivals
Boost operational efficiencies and scale up guest satisfaction
Enable sustainable revenue growth and improve forecasting and pricing
Use real-time data and insights for strategies and decision- making
Evaluate effectiveness of employees
Understand changes over time and factors that impact results

Downloadable Free Guide: Comprehensive Hotel KPI PDF

If you’re a hotel owner, then chances are that you’ll need a better overview of the key metrics that you should incorporate into your strategy/decision-making blueprint. Simply download this useful hotel KPI PDF for free and get detailed information and insights on all the KPIs listed above. It will help you understand these performance tracking metrics and decide on the ones that work for your property/brand.

One-Stop Hotel KPI Dashboard with aPerfectStay

With advanced technological solutions transforming the global hospitality industry, you don’t have to worry about implementing vital hotel KPIs anymore. You can simply sign up for cutting-edge tools like aPerfectStay to streamline and manage all your crucial metrics without any hassles. From booking and channel managers to property management systems, housekeeping, inspections, concierge and guest applications, aPerfectStay is an end-to-end solution for all hotel owners.

It takes care of every aspect, while there are extensive financial and other reports which help you gain more visibility on the business and its performance. The unique reporting system has several components including history and forecast, guest app usage, arrival revenue, gross profit report, pace report, sales insight and more. The best part is that they are all customisable, while you also get access to channel wise arrival and booked revenue reports along with custom inspection reports for housekeeping. aPerfectStay is thus an ideal solution for viewing, tracking and managing KPIs with real-time and data-based insights for better decision-making.

Maximise Your Hotel’s Performance with Key Metrics

In a competitive hospitality era, there’s no denying the importance of hotel KPIs in terms of helping you consistently track and improve performance at multiple levels. Scale performance, revenues and operations to the next level with the right metrics and insights on how to leverage them for maximum benefits. Find out what’s working, what’s not and what you can do to bring hotel performance in line with your specific business priorities. This will help you build a sustainable and flourishing hotel brand in the long run.