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.
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?
Reviewing your actual results is all about decrypting the past to assess your momentum and identify opportunities for improvement.
WHAT: Tactics change but the fundamental metrics by which you measure your success don’t. Let’s remind ourselves what these are:
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
WHAT: Available through industry-specific bureaux, review market share index information for your hotel against your compset, specifically:
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.)
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:
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
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
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
By reviewing the future, you can alert yourself early enough to prioritise action, provide support or push for further optimisation.
WHAT: Key considerations at the start of the year
LOOK FOR: Information on:
WHY: To help shape your general plans before you refine them later down the line
WHAT: Your forecast for the next three months, focusing on:
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
WHAT: As above, review the dominant segments in your mix of room nights
LOOK FOR: These metrics:
WHY: To refine your efforts by segment
WHAT: As above, review the dominant channels in the mix of room nights
LOOK FOR: These metrics:
WHY: To refine your efforts by channel
ALSO REVIEW: Whether you're in parity
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:
The acclaimed rate shopper offers unlimited, real-time access to current, future and past rates for you and your competitors.