In the competitive hospitality industry, hoteliers need to keep an eye on several indicators to gauge the efficiency of their operations, quality of customer service, profitability and overall business success. With increasing competition (in the United Arab Emirates, for example, the number of hotels has increased by 20% in the last five years), it's crucial to keep an eye on key metrics to maintain a competitive edge in the market.
Average Daily Rate (ADR) – This metric indicates the average room rate. It's calculated by dividing the total revenue from room sales by the number of rooms sold in a given period. To increase ADR, strategies such as targeting specific customer segments that are willing to pay higher prices, improving service quality, investing in digital solutions to fulfil guest preferences and using effective marketing strategies can be implemented.
Revenue per available room (RevPAR) – RevPAR measures revenue per room excluding additional services. It's calculated by multiplying the ADR by the hotel's occupancy rate. Analysing RevPAR helps refine pricing. It determines the minimum RevPAR needed for profit. Strategies to increase RevPAR may include efforts to raise hotel occupancy. They may also include adjusting prices accordingly.
Average length of stay (ALOS) – ALOS indicates the average length of stay of guests in a hotel. Monitoring this metric is important for recognising seasonal trends and forecasting demand for specific periods.
Average check per guest – This metric indicates the average amount spent by guests at a hotel. Studying this figure helps find popular services or products. It gives info on how to maximise revenue. You can use this indicator to find which services or products are most in demand. It tells you what measures to take to increase revenue. For example, guests rarely order food from room service and the spa is underutilised. There is plenty of room for optimisation here. For example, switching from a paper menu to an electronic version. You can supplement it with a system of suggestions, discounts, and special offers. Our experience with the Hoop service shows that the average number of orders has increased by 20%. We have also made order processing faster.
Percentage of repeat visitors – This metric reflects the percentage of guests who have stayed at the hotel before and decide to book again. A high percentage indicates customer satisfaction and loyalty. A low percentage, on the other hand, is an indication of customer feedback and areas for improvement. Repeat bookings are influenced by effective marketing strategies, e.g. appealing email newsletters and attractive loyalty programmes.
Staff satisfaction – The quality of hotel staff has a direct impact on the level of service and guest experience. Monitoring staff satisfaction levels is critical. This is done through regular surveys on comfort, salaries, and work barriers. It is key to keeping service standards.
Summary
Digital solutions have made it easier to track and analyse these metrics. They let hoteliers make informed decisions fast. This flexibility is critical to business growth in the dynamic hotel industry.