INSTITUTE OF HOTEL MANAGEMENT AHMEDABAD

ROOMS STATISTICS

1. TREVPEC stands for: Total Revenue Per Client

It is is a very favourable KPI metric to calculate the total revenue generated per
customer. It is also taking into account double and family occupancy factors.

TREVPEC Formula: Total Revenue* / Total Number of Guests

*Total Revenue = Accommodation + Breakfast + Spa + Bar + Mini Bar +[Any other
extra revenue]

2. TREVPAR stands for: Total Revenue Per Available Room

It is a hotel KPI that gives a preview of the total revenue from all departments which
the room can generate. While RevPar only takes account of the revenue generated
by the rooms.

This calculation is preferable for the management board and the accountants to
have a broad and more generic view of the hotel’s potential and its actual
performance. It is also a good benchmarking tool for all inclusive hotels or resorts.

TREVPAR Formula: Total Revenue* / Total Available Rooms

*Total Revenue = Accommodation + Breakfast + Spa + Bar + Mini Bar +[Any other
extra revenue]

3. RGI stands for: Revenue Generation Index.

RGI compares your hotel's RevPar to the average RevPar in the market. It is used to
determine if a hotel is gaining a fair share of revenue compared to its competition
set.

RGI Formula: RGI= Your Hotel's REVPAR / Hotel Market REVPAR

RGI = 1 The hotel RevPar is equal to the average RevPar of their comp set

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RGI > 1 The hotel RevPar is higher than the average RevPar of their comp set

RGI < 1 The hotel RevPar is less than the average RevPar of their comp set

4. REVPASH stands for: Revenue Per Available Seat Hour

REVPASH as a revenue management tool for food and beverage outlets in a hotel
(similar to RevPar for Rooms). This calculation is useful to measure the usage and
revenue of a seat per hour and it allows a better understanding and planning for the
food and beverage manager. Restaurants take reservations but walk-in guests are
commonly expected during opening hours.

REVPASH Formula: Total Outlet Revenue / (Available Seats x Opening Hours)

It can be calculated hourly, daily, weekly and monthly.

It is also used to support restaurants to plan the labour scheduling, food purchasing,
marketing tools and budgeting during the lowest occupancy.

5. REVPAM stands for: Revenue Per Available Square Meter

It is a KPI relevant for hotels which rent out its space for conferences and banquets.
The utilization efficiency of the sales department is calculated on the revenue per
available square meter of the banquet space.

REVPAM Formula: Revenue / Available square meter of banquet space (m2)

6. KPI is an acronym for: Key Performance Indicator

KPI includes a set or ratios and formulas that help calculate and indicate the
performance and progress of a hotel accordingly to their plans and actions.

Here are example of series of standard Key Performance Indicators to monitor and
to benchmark performance of different departments in a hotel.

Examples of KPI in Rooms: Average Room Rate, Bedroom Occupancy Rate, Revenue per
Available Room, Cost per Occupied Room, Labour Cost Ratio

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7. CPOR stands for Cost Per Occupied Room.

The CPOR formula helps calculate the average cost per occupied room in the hotel.
This is another KPI to measure and analyze if the operating cost for each room is
reasonable.

How do you calculate CPOR?

CPOR Formula: Total Rooms Departments Cost / Number of Rooms Sold

8. RevPOR stands for: Revenue Per Occupied Room

RevPOR, unlike RevPAR, considers revenue per occupied room which gives you a
better understanding of how much profit you make from the guests who
actually stay at your property.

What is the meaning / definition of Open Pricing in the hospitality industry?

The great thing about pricing by most hotels around the globe is that nothing is set in
stone. That is, there can be flexibility where prices have to sometimes be pitched at
differing levels, according to the various target markets and
distribution channels involved. This pricing approach, known in the Hospitality
Industry as Open Pricing, is an ideal option for hotels operating independently, but it
can also be an adopted method for entire hotel chains and groups!

What is the meaning / definition of Opaque Sites, in the hospitality industry?

Opaque Sites are booking channels and OTA websites where the supplier (in this
case the hotel) remains hidden until after the purchase is complete. The customer
sees only the product category (destination, star rating of the hotel) and the price but
not the brand. After paying, the website will reveal the name of the hotel. Usually it
doesn’t accept refunds, changes or cancellations.

What is the meaning / definition of MPI in the hospitality industry?

MPI stands for: Market Penetration Index

MPI is a calculation to measure your hotel´s occupancy compared to the average

market occupancy levels (also referred to as market share).

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This tool helps the hotel to see its position and performance in proportion to the
competitors and the market in general.

MPI Formula: Hotel Occupancy % / Market Occupancy %

What is the meaning/definition of Fair Market Share in the hospitality industry?

Fair Market Share is an indication that a hotel’s overall performance stacks up

against its immediate competitors.

A hotel within a competitive set can work out if it’s getting its Fair Market Share
through a simple calculation:

Fair Market Share = Total number of rooms at the hotel / Total number of rooms in the comp
set

LRA is short for Last Room Availability. At the contracted rate, an agent can book
the last room a hotel has available, by right. Some people may be surprised by this,
thinking that a hotel has complete control over room booking decisions at their
premises, at all times. But, because of LRA, this is not necessarily always the case!

Even if a hotel only has one single room available, a room-seeking party with a
contract has a right to buy it; it can't just be left vacant.

Sources

Adapted from Kasavana Michael L. 2009, Managing Front Office Operations 8th
edition AHLEI, ISBN: 978-0-86612-338-9

Authorship

Jaya Sharma

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