Three sets of key data and indicators of hotel business are defined, and they are based on the world standard Uniform System of Accounts for the Lodging Industry.

The acronym KPI (Key Performance Indicators) stands for key performance indicators.

ARR - Average Room Rate - Average room price/rate

Is a KPI that measures average cost/rate per available room – similar to ADR.

Both can be used for the same purpose – to calculate the average room rate. However, ARR can also be used to measure the average rate over a longer period of time (weekly, monthly), while ADR can only be used to measure the average rate of one day. They are needed to measure the hotel's financial performance.

How to calculate ARR?

The formula is:  ARR = total room revenue / total room occupied

ADR - Average Daily Rate - Average daily price/room rate

Is a KPI used to calculate the average price or rate for each hotel room sold for a given day.

It is one of the most common financial indicators for measuring a hotel's performance in relation to other hotels that have similar characteristics such as size, clientele and location.

How to calculate ADR?

The formula is: ADR = Room Revenue / Rooms Sold

OCC - Occupancy Rate - Room occupancy rate

Is a KPI that shows the percentage of rooms or beds sold for a certain period of time.

It is important that hotels monitor this data on a daily basis in order to determine the average daily rate, forecast and apply revenue management.

How do you calculate occupancy?

The formula is: OCC = Rooms sold / Rooms available

REVPAR - Revenue per Available Room - Revenue per available room

Is a KPI and is considered one of the most important financial calculations of any hotel in order to see how much revenue has been generated in a certain period of time.

When the analysis is performed, the RevPar figures can be compared to the hotel's RevPar during the same time period in previous years or to its group.

With RevPAR, you can only estimate your revenue as a percentage of room sales, not including all the other factors that also factor into profitability (like tours, room service, and spa reservations).

How do you calculate Revpar?

The formula is:  RevPAR = Room Revenue / Available Rooms

CPOR - Cost per Occupied Room - Cost per occupied room

Is a KPI that helps calculate the average cost per occupied room. This is another KPI to measure and analyze if the operating costs for each room are reasonable.

How do you calculate CPOR?

Formula: CPOR = Total cost of rooms / Number of rooms sold

REVPOR - Revenue Per Occupied Room - Revenue per occupied room

Unlike RevPAR, RevPOR is considered revenue per occupied room, which allows you to better understand how much profit you make from guests who actually stay in your hotel.

With RevPOR, you can track returns from departments other than rooms, such as food and beverage, spa treatments, etc.

How do you calculate REVPOR?

Formula: REVPOR = Total income (accommodation + breakfast + bar + mini bar + other services) / Total occupied rooms

RevPOR lets you know how successful you really are when a customer steps into your hotel, which is critical to evaluating your overall performance.

TREVPAR – Total Revenue Per Available Room -  Total revenue per available room

Is a KPI that provides an overview of the total revenue from all services that the room can generate. While RevPar only considers revenue generated by rooms.

This calculation is desirable so that management and accountants have a broader and more general view of the hotel's potential and its actual performance. It is also a good comparison tool for any hotels or resorts involved.

How do you calculate TREVPAR?

Formula: TREVPAR = Total income (accommodation + breakfast + bar + mini bar + other services) / Total available rooms.

ARI - Average Rate Index - Average price/rate index

Is a KPI that measures the performance of ADR in relation to their set in the same period (competitor set: a group of other hotel brands and competitors that have a similar target market and concept).

How to calculate ARI?

Formula: ARI = ADR of the hotel / ADR of the competition

Example:

Hotel's ADR is $150 / competitor's ADR is $120 = Result is 1.25

This means that the ADR is 25% better than the average of your competition

When is it:

• ARI index = 1.00 ADR of the hotel is equal to the average ADR of the competition
• ARI index > 1.00 ADR of the hotel is more expensive than the average ADR of the competition
• ARI index < 1.00 ADR in the hotel is cheaper than the average ADR of the competition

Depending on the occupancy rate, the hotel can choose a lower, equal or higher ADR compared to the ADR or their set in order to generate more income and make itself more competitive with its competitors.

GOP - Gross Operating Profit – Gross operating profit

It is an indicator that refers to the hotel's profit after deducting all their operating costs. This illustrates the level of operational profitability of the hotel

How do you calculate GOP?

Formula: GOP = Gross Operating Income – Gross Operating Expenses

GOPPAR - Gross Operating Profit Per Available Room - Gross operating profit per available room

It is one of the most effective ways of checking the performance of your hotel and making adjustments that affect the best interests of achieving the hotel's goals.

GOPPAR is a KPI that allows hotels to apply the laws of economics to the entire revenue management process and make adjustments not only by achieving the top line, but also by aligning it with the bottom line. From a property perspective, GOPPAR allows you to see what the value of your property is at a given point in time. The hotel is really two goods in one: a real estate asset and a business.

How do you calculate GOPPAR?

Formula: GOPPAR = GOP (Gross Operating Profit) / Available Rooms

PROFPAR - Profit Per Available Room - profit per available room

Is the KPI for calculating the profit for each room available in the hotel. PROFPAR is based on operating profit, which is calculated on the movements of both income and expenses.

How do you calculate PROFPAR?

Formula: PROFPAR = Operating profit per year / Daily available rooms per year

EBITDA - Earnings Before Interest, Taxes, Depreciation and Amortization - Earnings before interest, depreciation and amortization

Is a KPI used to determine the profitability of a company or company in terms of its operations (profit from the products it produces and sells).

EBITDA is calculated by taking a company's earnings before interest, taxes, depreciation and amortization and subtracting them from44 the company's total revenue. It is also an indicator of the company's financial performance and can be used to analyze and compare profitability between hotels / companies / industries because it eliminates the effects of financial and accounting decisions.

How do you calculate EBITDA?  

Formula: EBITDA = Income - expenses (excludes interest, tax, depreciation costs)

NOP - Net Operating Profit - Net operating profit

NOP stands for Net Operating Profit, also known as NOI (Net Operating Income). It is a KPI / calculation of net operating income / profit after deducting all operating costs from the income generated by the hotel.

Basically, net operating profit refers to the amount of money a hotel makes after distribution costs and operating expenses are deducted. In this way, it is used whether the hotel earns more than it spends or operates at a loss.

It serves to examine the cash flow of an investment before taking into account the effects of taxes and financing costs. This performance indicator is often a crucial value for investors as part of their assessment of real estate value.

How do you calculate NOP?

Formula: NOP = Realized income - operating expenses

RGI - Revenue Generation Index - Income Generation Index

RGI compares your hotel's RevPar to the average RevPar in the market. It is used to determine whether the hotel earns a fair share of the revenue in relation to its share.

How do you calculate RGI?

Formula: RGI = RevPAR for your hotel / RevPAR of hotels (competitors)

REVPAM - Revenue Per Available Square Meter - Revenue per available square meter

Is the KPI relevant for hotels that rent their space for conferences and banquets. The efficiency of using the sales department is calculated on the revenue per available square meter of banquet space.

How do you calculate REVPAM?

Formula: REVPAM = Income / Available square meter of banquette (m²)

TREVPEC - Total Revenue Per Client - Total revenue per customer

It is a very favorable KPI metric for calculating the total revenue generated per customer. It also takes into account factors of double and family occupancy.

How do you calculate TREVPEC? Formula: Total income (accommodation + breakfast + bar + mini bar + other services) / Total number of guests