Hotel KPI's explained: ADR, REVPAR and GOPPAR - Revfine ...

1. ADR – Average Daily Rate · 2. REVPAR – Revenue Per Available Room · 3. GOPPAR – Gross Operating Profit Per Available Room. Skiptocontent HotelKPI’sexplained:ADR,REVPARandGOPPAR Home/RevenueManagementKPI’s,RevenueManagementTips/HotelKPI’sexplained:ADR,REVPARandGOPPAR PreviousNext HotelKPI’sexplained:ADR,REVPARandGOPPAR ViewLargerImage Revenuemanagementisadata-drivenapproachtopredictingcustomerbehaviour,withaviewtooptimisingproductpricingandavailability,inordertomaximiserevenue.Itisespeciallyusefulinthehotelindustry,becausehotelshavealimitednumberofroomsavailableandexperiencevaryinglevelsofdemand. Whencarryingoutarevenuemanagementstrategy,thereareanumberofkeyperformanceindicators,orKPIs,whichshouldbetracked.Essentially,KPIsarequantifiablemeasures,whichallowabusinesstoassessandcompareperformanceovertime.Inthisarticle,welookatthreeofthemainrevenuemanagementKPI’s. 1.ADR–AverageDailyRate OneofthemostimportantKPI’sformeasuringtheperformanceofahotelagainstcompetitors,especiallythoseofasimilarsizeandinasimilarlocation,ADRstandsfor“averagedailyrate”.Byusingthismetric,hotelmanagementcanknowtheaveragepricepaidperroomonaspecificdayandmonitortrendsoveralongertimeframe. ToworkoutyourADR,yousimplydivideroomrevenuebythenumberofroomssold.So,forexample,ifyouhavearevenueof€20,000andhavesold200rooms,yourADRwouldbe€100. Itshouldbenotedthatonlyroomsthatwereactuallyavailableforsaleshouldbefactoredintoyourcalculations.Thismeansthatyoushouldnottakeintoaccountanyroomsthatarebeingusedbystaffmembers,norshouldyouincludeanycomplimentaryroomsthatyouhaveallocatedtoguests. FindmoredetailedinformationaboutADRinthearticle “WhatisADR?”. 2.REVPAR–RevenuePerAvailableRoom AnotherextremelyimportantkeyperformanceindicatorforrevenuemanagementisREVPAR,or“revenueperavailableroom”.AlthoughatfirstglanceitmayseemsimilartoADR,itsuseissomewhatdifferent,asitcanhelptotellyouhowsuccessfulyouhavebeenatactuallyfillingtheroomsinyourhotel. TocalculateREVPAR,yousimplydivideyourtotalroomsrevenuebythetotalnumberofroomsavailable.So,ifyourrevenueis€30,000andyouhave600roomsavailable,yourrevenueperavailableroomwouldbe€50. Perhapsthemainthingtotakecarewithwhencalculatingyourrevenueperavailableroomisthatonlyrevenuegeneratedbyactuallysellinghotelroomsshouldbeincluded.Thismeansthatyoushouldnotfactorinotherrevenuestreams,suchasrevenuefromyourrestaurant,orfromdrinkssoldatthebar. FindmoredetailedinformationaboutREVPARinthearticle “WhatisREVPAR?”. 3.GOPPAR–GrossOperatingProfitPerAvailableRoom Finally,GOPPAR,or“grossoperatingprofitperavailableroom”followsonfromREVPARquitenicelyinthatitisalsoaKPImeasurementbasedonthenumberofroomsyouhaveavailable,ratherthanactualsalesmade.However,unlikeREVPAR,whencalculatingGOPPARyoutakeintoaccountallsourcesofrevenue. Tocalculateyourgrossoperatingprofitperavailableroom,youmustfirstworkoutyourgrossoperatingprofit,whichisgrossrevenueminusgrossexpenses.Fromthere,divideyourgrossoperatingprofitbythenumberofroomsthatareavailabletobesoldtoguests. TheprimaryvalueofGOPPARasametricisthatitallowsyoutoseethebiggerpicture.Afterall,whileroomsarethemainrevenuesourceinhotels,youarealsolikelytobemakingmoneyfromotherareas,suchasfoodanddrinksales.Therefore,itallowsmanagerstoseehowtheirbusinessisperformingoverall. FormoredetailedinformationaboutGOPPAR,likehowyoucancalculateit,alsohavealookat “WhatisGOPPAR?”. Effectivehotelrevenuemanagementisdata-drivenandrequiresthetrackingofkeyperformanceindicators.Ultimately,bytrackingyourADR,REVPARandGOPPAR,youwillbebetterplacedtomakedecisionsregardingpricing,whichcanthenhelpyoutogeneratethemaximumpossibleamountofrevenuefromyourhotel. MoreTipstoGrowYourBusiness Revfine.comisaknowledgeplatformforthehospitality&travelindustry.Professionalsuseourinsights,strategiesandactionabletipstogetinspired,tooptimiserevenue,innovateprocessesandimprovecustomerexperience.Youcanfindallhotel&hospitalitytipsinthecategoriesRevenueManagement,Marketing&Distribution,TechnologyandSoftware. Revfine.com2020-12-22T14:26:03+01:00 RelatedPosts RevenueManagementGuide:CalculatingCosts&QualityAnalysis December2nd,2021 | 0Comments ToolsoftheTrade:WhyRevenueManagersNeedtoBeActiveSoftwareReviewers November30th,2021 | 0Comments Forward-LookingDemandData:TheSecrettoOptimisingRevenueinChallengingTimes November18th,2021 | 0Comments 5StepstoMasterTheBasicsofHotelBenchmarking November15th,2021 | 0Comments 3WaystoStreamlineUpsellingAcrossYourEntireHotelChain October18th,2021 | 0Comments ProtectingYourHotel’sCashFlow&ImprovingAssetValuation October18th,2021 | 0Comments LeaveACommentCancelreplyComment Δ PracticalTipsbyCategory: PopularArticles: Pageloadlink ShareThisKnowledgeLinkedInTwitterFacebookWhatsAppPrintEmailCopyLinkRedditInstapaperVKontakteFacebookMessengerTelegramSMS Revfine.comusesfunctionalandanalyticalcookies.Clickhereforourprivacypolicy. Ok  Followusonsocialmediaforthelatesttips! Follow@Revfine_com SendthistoafriendSendCancel GotoTop