The hospitality industry has been offering a few other indexes in the recent years that tried to compete with RevPAR. A more accurate, performance indicator is Adjusted RevPAR, which provides a clear reflection of the “bottom line profit”.
RevPAR is not the most perfect index for measuring a hotel’s actual productivity (or, the Revenue Management and pricing strategy, to be exact), regardless of the widely spread opinion in the hotel industry. This statistic does not objectively reflect the performance (and profitability) of your hotel, due to the following:
– It does not take CPOR into account (costs per occupied room). You can’t tell what optimal occupancy you need to reach by only looking at your RevPAR.
– It does not take into consideration any additional income a hotel may have from other revenue-generating departments (restaurants, meeting space, banquet rooms, casinos, parking, spa, etc.)
By: Ira Vouk (A successful Revenue Manager at multiple hotel properties)
The above is an extract of the original article available at: HospitalityNet