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Top KPIs Every Hospitality Professional Should Be Tracking

September 13, 2021
Reading Time: 4 minutes

As a hospitality professional, your day-to-day is likely spent juggling a multitude of tasks in order to keep operations running smoothly. Add on the layer of COVID-19 safety precautions and recovery planning and it’s easy for things to pile up pretty quickly.

While these functions can take up a significant amount of time, it’s still important to keep a close eye on your business metrics to ensure operations aren’t just running, but running optimally.

 

Average Daily Rate (ADR)

What It Is: ADR calculates the average amount of revenue an occupied room brings in per night in a given time period.

Who Should Track This: Hoteliers

Why It’s Important: Although it’s only one measure of performance, ADR serves an important function as it provides a birds-eye view of the amount that guests are spending on their rooms each night. Hoteliers can use this information to help determine if their pricing strategy is appropriate or needs additional adjustment.

Average Daily Rate (ADR)

Revenue per Available Room (RevPAR)

What It Is: RevPAR gives hotels insight into their ability to fill available rooms at their average daily rate.

Who Should Track This: Hoteliers

Why It’s Important: RevPAR takes a step up from ADR and Occupancy by giving insight into the revenue earned across all available hotel rooms, not just the ones sold. It expresses the total room revenue divided by the number of available rooms.

Revenue per Available Room (RevPAR)

Negotiated Contract Rates

What It Is: An evaluation determining if negotiated rates with partners are still mutually beneficial.

Who Should Track This: Travel Agencies

Why It’s Important: Negotiated rates with travel partners is what gives many travel agencies an edge in the market, but sometimes those contracted rates don’t keep up with market trends. Agencies should review these rates to determine if pricing is appropriate or if other vendor relationships would be more profitable.

 

Adherence to Approved Rates

What It Is: A metric showing how often travelers comply with a corporate travel department’s outlined policies.

Who Should Track This: Travel Agencies

Why It’s Important: If you’re a corporate travel department, keeping track of non-compliant bookings helps to ensure that travel spend stays within budget. If compliance reduces, it may be that employees are misunderstanding policy or that the negotiated channels aren’t sufficient for business needs.

 

Reputation Scores

What It Is: A measure of client and partner sentiment related to a hotel.

Person typing on laptop showing analytics information on customer service surveys or tracking Net Promoter Score

Who Should Track This: Hoteliers and Travel Agencies

Why It’s Important: Reputation has always been important, but has become even more prominent in the digital age. As customers navigate buying cycles, they seek out reviews and references to help reinforce their purchases. You can get in front of your online reputation by sending out customer service surveys or tracking Net Promoter Score (NPS) and acting when negative feedback arises.

In addition, you can regularly monitor sites like Yelp and Tripadvisor to gauge what customers and potential customers are saying about your brand. These reviews not only help you with internal training opportunities, but can also give you insights into service or product blind spots that you may not have been aware of.

Customer Acquisition Cost

What It Is: The cost of converting a potential buyer from a prospect into a paying customer.

Who Should Track This: Hoteliers and Travel Agencies

Why It’s Important: As many hotels are using promotions and deals to help stimulate demand, it’s important to ensure that the costs of acquisition – including marketing, discounts, and rebates – don’t exceed the lifetime value of the customer.

Customer Acquisition Cost

Partner Performance Metrics

What It Is: A view into the success and profitability of partner and vendor relationships.

Who Should Track This: Hoteliers and Travel Agencies

Why It’s Important: Referral partners can be the lifeblood of a hotel, but only if they bring in a sizeable book of business. Hotels should review contracts with agencies and other partners to ensure they are still favorable for both parties. Metrics like average deal size and number of referrals are useful in determining if partnerships and contracts require further evaluation.

Many solutions can help with tracking partner performance. Onyx’s RecoverPro, for example, provides agents with a dashboard that highlights the top 10 hotel partners based on commissionable volume. Onyx’s other solutions – notably CommPay and Sure Pay – also provide details of hotel and agency transactions and automate a great deal of the commission process so that hoteliers and agencies can place their focus on using the KPIs to optimize their processes and positively affect their bottom line.

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