Increase RevPAR by Improving Performance

Revenue per available room (RevPAR) is an undeniably an important factor in increasing hotel sales and boosting profitability overall. However, in some cases, it is also critical to look at other factors that might affect performance. Decisions surrounding the hotel size, long-term strategy, and service orientation all play a role in the hotel’s profitability. Take note that aside from RevPAR, another metric of the hotel’s financial health s performance. When times are lean, hotel revenue managers need to improve operational processes in order to enhance hotel profitability.

On the other hand, performance is also essential during the good times. It can be used as a tool for profit optimization. Effective hotel rate distribution, rate strategies, and the use of forecasting and inventory software are all helpful in ensuring the best results possible. Sometimes, certain hotel chains even take over their competitors in order to experience economies of scale through productivity gains.
There is no doubt that once hotel revenue managers understand how important productivity, RevPAR will increase. These two elements complement, rather than contradict, each other. But many make the mistake of concentrating on one but not the other. The balance between occupancy rate and hotel room rate can be categorized as RevPAR, it basically shows the income of the hotel. Meanwhile, performance and efficiency has more to do with controlling costs.

Hotels are generally labor-intensive but it does not necessarily mean that hotel revenue managers should allow the property to lose money just to keep up the current level of service. Improving efficiency may be a challenge but it is definitely possible to achieve. Today’s hoteliers find today’s condition particularly difficult though because there are too many rooms that are left unoccupied while fixed labor costs still remain.

Fortunately, there are tools like RevPAR Guru. This software application provides real time information about historical data, occupancy levels, and available amount of rooms. Good decisions can be made in real time. Prices can be adjusted according to actual demand and supply while unnecessary costs are eliminated through the use of this accurate forecasting software. It is not surprising that a lot of hoteliers are looking into this software for a solution. In tough economic times, there is no room for error. Basing your decisions on facts, and not guesswork, is your best bet in surviving the current downturn in the hotel industry.