Hoteliers the world over predict another year of solid demand and increased occupancy. Despite moderate growth in supply, the industry appears to be in rude health. But it remains a highly competitive market, and, in a sector as cyclical as ours, the good times don’t last forever.

At OTA Insight, we’re ever optimistic. But there’s no room for complacency. To weather any future storms - and just to do as well as you possibly can - is it time for an audit of your KPIs?

We talk to revenue managers day in, day out, and many OTA staffers have academic and professional backgrounds in hoteliership. So we’ve put our heads together to come up with this list of crucial KPIs for success.

Starting with your actual results and moving through to the highly analytical environment of forward-looking trends, we outline the WHAT, the specifics you should LOOK FOR and the WHY of each cluster of related KPIs.

Many will be familiar to you but are they all in your playbook?

Actual results

Reviewing your actual results is all about decrypting the past to assess your momentum and identify opportunities for improvement.

Core indicators

WHAT: Tactics change but the fundamental metrics by which you measure your success don’t. Let’s remind ourselves what these are:

• Occupancy
• ADR (average daily rate)
• RevPAR (revenue per available room) or room revenue, equal to ADR x occupancy
• Net RevPAR, i.e. RevPAR net of distribution costs (OTA commissions, distribution fees, etc.)
• F&B (food and beverages) revenue
• Total revenue

LOOK FOR: Variation compared to budget and to last year for each metric

WHY: To identify the “top” and “flop” contributors in your hotel portfolio by property, brand, market, city etc. so you can implement support and optimisation strategies accordingly

Competitive environment

WHAT: Available through industry-specific bureaux, review market share index information for your hotel against your compset, specifically:

• Occupancy, according to the MPI (market penetration index)
• ADR, according to the ARI (average rate index)
• RevPAR, according to RGI (revenue generation index)

LOOK FOR: Variation compared to last year for aggregated results for each measure and whether you’re above or below the 100% mark

WHY: To identify the “top” and “flop” contributors in your regional hotels so you can implement support and optimisation strategies accordingly

ALSO REVIEW: Industry trends, not just of your compset but of the market or sub-segment on a chain-scale, looking at occupancy, ADR, RevPAR and variation to last year and changes to hotel supply (openings, conversions, renovations, etc.)

Getting granular...

Segmentation details

WHAT: Review the dominant segments in your mix of room nights, such as contracted individuals, business groups, etc.

LOOK FOR: Variation in revenue vs target and last year’s performance for each segment. To go a step further, explore how much of this variation is linked with changes in:

• Volume - overall number of rooms sold
• Price - increases or decreases applied in your price grid
• Segment mix - business shifting from one segment to another

WHY: To identify the key segments in your business mix as well as those currently driving your revenue change; also to assess the impact of price changes vs segment mix adjustments and understand what is most profitable for your properties

Channel details

WHAT: Review the dominant channels in the mix of room nights, such as brand.com, booking.com, GDS, etc.

LOOK FOR: As with segmentation but instead for channel; also compare direct and indirect web traffic for relative share and revenue trends

WHY: To identify the key channels driving revenue change

Guest details

WHAT: Retrievable from your PMS, guest information provides a rich source of actionable insight if well presented and accurate

LOOK FOR: Data on your feeder market, also known as point of sale; also consider your loyalty programme contribution to revenue and variation to last year

WHY: To identify dominant source markets in the mix and the key markets driving revenue change

Forward-looking trends

By reviewing the future, you can alert yourself early enough to prioritise action, provide support or push for further optimisation.

Full-year outlook

WHAT: Key considerations at the start of the year

LOOK FOR: Information on:

• Events and your calendar - assess the impact on the market in terms of number of full business weeks, and key citywide conferences and events etc.
• Seasonality - business or leisure months, traditional need periods
• Expected trends by month based on budget estimates and rooms OTB (on-the-books) pace

WHY: To help shape your general plans before you refine them later down the line

Three-month forecast

WHAT: Your forecast for the next three months, focusing on:

• Occupancy
• ADR
• RevPAR
• Other revenues

LOOK FOR: Variation compared to budget, to last year’s actual results and forecast and to last year’s forecast for each metric

WHY: To identify the “top” and “flop” contributors in your hotel portfolio by property, brand, market, city etc. so you can refine your support and optimisation strategies accordingly

Getting granular...

On-the-books by segment

WHAT: As above, review the dominant segments in your mix of room nights

LOOK FOR: These metrics:

• OTB/delay vs same point in time last year in volume and revenue, split by key segments
• Split of advance/delay coming from volume, price and change in segment mix
• Compared forecast and OTB analysis - is your forecast too conservative or ambitious? By percentage of forecast already OTB by segment; and business left to pick-up vs pick-up achieved last year

WHY: To refine your efforts by segment

On-the-books by channel

WHAT: As above, review the dominant channels in the mix of room nights

LOOK FOR: These metrics:

• OTB advance/delay vs same point in time last year in volume and revenue, split by key channels
• Comparison of direct and indirect web traffic for OTB trends - share of mix and advance/delay vs last year
• POS - advance/delay in key feeder markets

WHY: To refine your efforts by channel

ALSO REVIEW: Whether you're in parity

Price positioning

WHAT: A view of your price positioning vs competitors on public segments and channels for future dates using a rate shopper

LOOK FOR: Whether your advertised BAR prices are above, below or on a par with the median price of your compset; drill down for more data on specific competitors

WHY: To adjust your strategy, marketing offers and - if necessary - prices (up or down)

Here's a summary of this piece in graphic form: