Hotel Revenue Management

Everything Your Small Accommodation Provider Needs to Know About RevPar

Small hotels and accommodation providers sometimes feel they can’t be part of the conversation when it comes to crucial aspects of hotel management such as RevPAR. This can be problematic, as RevPAR is crucial for boutique enterprises just as readily as larger establishments and can transform the way that your business operates.

If you want to get involved with the conversation, here’s everything you need to know about RevPAR as a smaller hotel.

What is RevPAR?

RevPAR, or revenue per available room, is a vital metric for assessing how successfully your business is performing. Through tracking the information on how much your rooms are being reserved for, you will be able to discover how well you are currently doing. It will demonstrate where improvements can be made to maximise your ability to generate revenue from your rooms. It’s an essential metric that can drive future decision-making processes.

Calculating RevPAR

To work out your hotel’s RevPAR, you need to calculate your revenue per room and the rooms you have available. It is best to do this for specific times in the year, and compare with busier periods, identifying when rates need to rise and fall. It is tricky to determine a successful RevPAR as this varies across the hotel market and is influenced by exterior factors.

However, there are a few common mistakes you can avoid with your own small business, most prominently:

Conceirge Services

1. Relying Heavily on OTAs

Online travel agents (OTAs) have grown in popularity in recent years, but it’s important not to allocate all your rooms to them. Whilst an OTA will help you grow your occupancy rates, they will also deplete your funds over time by cutting your revenue through commission. There are ways of balancing direct and third-party bookings that allow you to get the best of both worlds, and a company specialising in hotel marketing solutions will be able to point you in the right direction for creating and implementing a beneficial strategy. Ideally, you want as many bookings as possible to be made directly, giving you full control over the customer experience.

2. Excessive Spending

Reducing your spending doesn’t always mean your customer experience is negatively affected. It is possible to cut outgoings while still delivering the same service that your returning customers are used to. As a business you should regularly perform assessments of the areas that seem to be sapping money from your business, allowing you to identify potential opportunities to balance the sheets.

3. Ignoring Added Value

Lots of small hotels and guesthouses forget that they are not just selling a room but an experience. To draw in more revenue, consider how you can increase the perceived value of your offering by adding extras which will give guests an enhanced stay. This could be anything from a complimentary breakfast to a discount on a local attraction – things that boost the experience for visitors is likely to boost your RevPAR in turn. Don’t be afraid to describe your hotel’s attributes, as the ultimate way of enhancing your offering.