RevPar, the Missunderstood Statistic

RevPar (Revenue Per Available Room) has become one of the most important data in Hospitality in the last couple of years, but why? –As hotel occupancy levels drop, revenue decreases, costs get harder to maintain on a healthy level, and therefore, cuts must be done in order to keep the business up float, and it all becomes a vicious circle that at the end, it always affects Customers. This single number (RevPar) can give you a full understanding on your property values so here are some tips I’ve practiced to maintain and increase RevPar (remember that outlets, shops, tours and any money that the hotel makes affects the RevPar):

1.-Involve as many employees as you can (MOTIVATION), as the Management Team cannot be all the time at all places talking to Clients, line employees (Maids, Clerks, Cooks, Waiters, Maintenance, Security) can and must recommend internal services for an extra charge (it can be fun to develop an incentive and awareness program).

2.-Analyze what your Customers needs are and fulfill them ALL, manage how to maintain Guests “captive” at your property, otherwise, they will end up spending precious money outside.

3.-Steps for analyzing the Rooms revenue (this will eventually leads you to RevPar maximizing);
Income Management
Channels Management
Inventory Control
GDS Distribution
Web Page repositioning (internet marketing)
Prices optimization
Historical and New Reserves

4.-Create a well-thought rate structure; investigate your competitors, the destination and your own services (of all hotel services, not just rooms).

5.-ALWAYS maintain excellent service levels (remember that an exceptional service does not always has a cost). This particular point makes sense when you are taking back loyal Clients (less marketing costs and word to mouth advertisement, FREEEEE)

6.-Charge on what you don’t have to give away (ie. A bad service at restaurant will cause Guest inconveniences, and you will end up giving away a gift certificate or a free dinner, “time consuming, cost ineffective”.

7.-Get your Management Team to work as a team, they are the minds behind all operations, good ideas can return as great ideas and revenue generation.