Key hotel industry performance metrics to know

To succeed in hotels, you need to watch your dates. Hotel metrics—also called hotel performance metrics—are key for owners, managers, and revenue teams. They show what's actually working, spot wasted effort, and help you keep up in a busy market. It doesn't matter if you run a cozy B&B or a big resort chain. Knowing the right numbers is how you stay profitable and grow.

This article covers the essential hotel metrics you should track. We’ll explain what each metric means, how it’s calculated, examples, and how to use it.

What Are Hotel Metrics?

Think of hotel metrics as your property's vital signs. They're just numbers that show how your hotel is doing – how full your rooms are, how much money you're making, what things cost, and if guests are happy.

Why track them? They let you:

See how you're doing: Compare your numbers to last month, your goals, or other hotels nearby. Is business better or worse?

Make smarter choices: These numbers help you decide what to charge for rooms, where to sell them, how many staff you need, how to market better, and where to improve for guests.

What Should Be Included in Key Hotel Metrics?

Effective hotel performance monitoring includes a combination of financial, operational, and guest-centric data. Below are the most widely used metrics across the hotel industry today, especially RevPAR and GOPPAR:

1. Occupancy Rate

Definition: The percentage of available rooms that are actually sold over a specific period.

Formula:
Occupied Rooms ÷ Available Rooms

This metric shows how well you are filling your inventory. High occupancy often reflects strong demand, but if paired with low rates, it might signal underpricing.

Scenario:

Hotel A (100 rooms) vs. Hotel B (100 rooms) on the same night. （All cases are based on this number.）

• Hotel A: 70 rooms sold → 70%
• Hotel B: 85 rooms sold → 85%

Comparison:
B has a higher occupancy rate (85% > 70%), which means B sold more rooms that day.

Only looking at the occupancy rate: B performed better and filled more rooms. But this doesn't tell us who made more money!

2. ADR (Average Daily Rate)

Definition: The average rate paid for rooms sold during a given timeframe.

Formula:
Total Room Revenue ÷ Number of Rooms Sold

ADR helps track pricing strategy and revenue per guest. A rising ADR may show stronger brand value or successful upselling, while a low ADR might mean pricing adjustments are needed.

Scenario:

• Hotel A: $10,500 revenue from 70 rooms → $150 ADR
• Hotel B: $10,625 revenue from 85 rooms → $125 ADR

Comparison:
A has a higher room rate ($150 > $125). A makes more money on each room sold.

Looking at just the ADR: A makes more money on each sale. But this doesn't tell us who has higher overall room revenue because B sold more rooms.

3. RevPAR (Revenue per Available Room)

Definition: A combination of occupancy and ADR that reflects overall room revenue performance.

Formula:
ADR × Occupancy Rate
or
Total Room Revenue ÷ Available Rooms

RevPAR is often considered a core hotel KPI. It gives a clear picture of how much revenue each room generates, whether sold or not.

What is the difference between ADR and RevPAR? | Smart Order

Discover the crucial differences between ADR and RevPAR in hotel operations. Learn how to calculate and utilize these metrics for pricing, performance evaluation & more. Essential insights for hoteliers.

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Scenario:

• Hotel A: $150 ADR × 70% occupancy = $105 RevPAR
  (or $10,500 ÷ 100 rooms)
• Hotel B: $125 ADR × 85% occupancy = $106.25 RevPAR
  (or $10,625 ÷ 100 rooms)

Comparison:
B has a slightly higher RevPAR ($106.25 > $105). Although A has a higher room rate, B sells enough rooms to make up for the lower room rate, resulting in higher revenue per available room (whether sold or not). This is the core metric for measuring room revenue efficiency!

ADR vs. RevPAR Core Difference:

ADR tells you: how much money is earned on average for each room sold.
RevPAR tells you: how much revenue is generated on average for each available room (taking into account occupancy).

4. TRevPAR (Total Revenue per Available Room)

Definition: Revenue from all streams—rooms, F&B, spa, parking—divided by total available rooms.

Formula:
Total Hotel Revenue ÷ Available Rooms

While RevPAR looks only at room revenue, TRevPAR includes every department. It’s more holistic and better for analyzing full property performance.

Scenario:

• Hotel A: Rooms ($10,500) + F&B ($3,000) + Spa ($1,500) = $15,000 total revenue → $150 TRevPAR
• Hotel B: Rooms ($10,625) + Parking ($500) = $11,125 total revenue → $111.25 TRevPAR

Comparison:
A's TRevPAR ($150) > B's TRevPAR ($111.25). Although B's RevPAR (room only) is slightly higher, A significantly increases its overall revenue through strong food and beverage and spa services.

RevPAR vs. TRevPAR Core Difference:

RevPAR only cares about room revenue.
TRevPAR cares about the total revenue of all departments of the hotel and better reflects the overall property's revenue-generating ability (especially for resorts or full-service hotels).

5. GOPPAR (Gross Operating Profit per Available Room)

Definition: Gross profit generated per available room.

Formula:
Gross Operating Profit ÷ Available Rooms

GOPPAR considers operating expenses, making it one of the best indicators of hotel profitability.

Scenario:

• Hotel A: Total revenue $15,000 - Operating costs $8,000 = $7,000 GOP → $70 GOPPAR
• Hotel B: Total revenue $11,125 - Operating costs $5,000 = $6,125 GOP → $61.25 GOPPAR

Comparison:
A's GOPPAR ($70) > B's GOPPAR ($61.25). Not only does A have higher total revenue, but it also has better profitability (earning more per available room after deducting costs).

RevPAR/TRevPAR vs. GOPPAR Core Difference:

RevPAR/TRevPAR measures revenue.
GOPPAR measures profit! This is one of the core indicators that owners and investors care about most, and it directly reflects the hotel's operating efficiency and ultimate financial results.

6. NRevPAR (Net Revenue per Available Room)

Definition: Net room revenue after subtracting acquisition costs like OTA commissions or marketing spend.

Formula:
Net Room Revenue ÷ Available Rooms

NRevPAR gives a truer view of room profitability by removing the costs of distribution, which are often significant.

Scenario:

• Hotel A: 50 of 70 rooms are booked through the official website/direct booking (0 commission), and 20 are booked through OTA (18% commission rate).
  • Gross room revenue = $10,500
  • OTA commission = 20 rooms * $150 * 18% = $5,400
  • Net room revenue = $10,500 - $5,400 = $5,100
  • Calculate NRevPAR: $5,100 / 100 = $51
• Hotel B: 60 of 85 rooms are booked through the official website/direct booking (0 commission), and 25 are booked through OTA (15% commission rate).
  • Gross room revenue = $10,625
  • OTA commission = 25 rooms * $125 * 15% = $4,687.50
  • Net room revenue = $10,625 - $4,687.50 = $5,937.50
  • Calculate NRevPAR: $5,937.50 / 100 = $59.38

Comparison:
B's NRevPAR ($59.38) > A's NRevPAR ($51). Although A's RevPAR ($105) is higher than B's ($106.25) and much higher than A's NRevPAR ($51), A relies heavily on high-commission OTA channels, resulting in lower room revenue than B! B has a better channel mix (more low-commission/no-commission direct bookings).

RevPAR vs. NRevPAR Core Difference:

RevPAR is gross revenue.
NRevPAR is net revenue (after deducting the cost of obtaining the room revenue, mainly distribution commissions). It is crucial for hotels that rely on OTAs and can reveal their true profitability.

7. CPOR (Cost per Occupied Room)

Definition: The average cost incurred to service an occupied room.

Formula:
Total Operating Costs ÷ Number of Occupied Rooms

This helps hoteliers understand how much is being spent on housekeeping, utilities, and other per-room costs.

Scenario:

• Hotel A: $8,000 operating costs ÷ 70 rooms = $114.29 CPOR
• Hotel B: $5,000 operating costs ÷ 85 rooms = $58.82 CPOR

Comparison:
B's CPOR ($58.82) < A's CPOR ($114.29). B is doing a better job of cost control and efficiency in serving each occupied room. This explains why B's GOPPAR ($61.25) is not much lower than A's ($70) at a lower ADR and total revenue.

ADR vs. CPOR Core Relationship:

ADR must be higher than CPOR to be profitable! If A's ADR is $150 and CPOR is $114.29, then each room sold has a gross profit of $35.71. If the ADR is lower than the CPOR, the more rooms sold, the more losses!

8. RevPAM (Revenue per Available Meter)

Definition: Measures revenue based on floor area rather than room count, useful for campgrounds or hostels.

Formula:
Total Revenue ÷ Total Sellable Area

This metric suits non-traditional accommodations and helps maximize space-based revenue.

Scenario:

A boutique hostel with mixed accommodation types (dorm beds + private rooms).

• Total Revenue (day): $5,000
• Total Rentable Space: 500m²
• RevPAM: $5,000 ÷ 500m² = $10/m²

9. Market Penetration Index (MPI)

Definition: A measure of your occupancy rate versus your local competition.

Formula:
Your Occupancy Rate ÷ Market Occupancy Rate

MPI shows whether you're outperforming or underperforming against comparable properties.

10. Average Rate Index (ARI)

Definition: Compares your ADR to that of competitors.

Formula:
Your ADR ÷ Market ADR

It shows whether you’re pricing rooms appropriately relative to similar hotels.

11. Revenue Generation Index (RGI)

Definition: A blend of ADR and occupancy performance versus competitors.

Formula:
Your RevPAR ÷ Market RevPAR

RGI is often used in revenue management to evaluate overall market positioning.

💡Market Index Examples

Market averages: 80% occupancy, $130 ADR, $104 RevPAR

12. Customer Acquisition Cost (CAC)

Definition: The cost of acquiring one customer through paid marketing, OTA fees, or other channels.

Tracking CAC helps balance marketing investments with real return. A high CAC may require a shift in strategy or reallocation of spend.

13. Customer Lifetime Value (CLV)

Definition: The projected revenue a customer will bring over their relationship with your property.

CLV focuses on retention rather than one-time bookings. Loyal customers tend to have a lower CAC and higher profitability.

14. Repeat Guest Ratio

Definition: The percentage of guests who have stayed more than once.

A high ratio indicates strong brand loyalty, consistent service, and effective marketing.

15. Net Promoter Score (NPS)

Definition: A guest satisfaction metric based on the likelihood to recommend your hotel.

NPS helps hotels assess customer satisfaction and the overall guest experience. A high score is often a leading indicator of future bookings.

💡When to Use Which Metric

From Data to Decisions

These hotel metrics give clarity. When reviewed consistently, they allow managers to see where improvements are needed, where opportunities exist, and how their hotel compares in the market. They are not just numbers—they’re guides for action.

Without tracking them, hotels may overspend on marketing, undercharge on rooms, or lose returning guests without knowing why.

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