KPI

Revenue Management KPIs for Hospitality Business

Objective: Maximize revenue throughout the year by optimizing pricing and
marketing strategies based on guest booking behavior and market trends.

Current Situation: We need to assess our current performance across these KPIs to
establish a baseline and identify areas for improvement.

Desired Outcome: Increase occupancy rates, Average Daily Rate (ADR), and
Revenue per Available Room (RevPAR) across peak and off-peak seasons.

Stakeholders: This information is valuable for revenue managers, marketing teams,

and hotel management in making data-driven decisions.

Here are some KPIs following the requested format:

KPI
KPI Category KPI Name Filter Period
Description/Formula

Percentage of rooms
Revenue Occupancy Daily, Weekly,
sold compared to None
Management Rate Monthly
total available rooms

Total Room Revenue

Revenue Average Daily divided by the Daily, Weekly,
None
Management Rate (ADR) Number of Rooms Monthly
Sold

Total Room Revenue

Revenue per
Revenue divided by the Daily, Weekly,
Available Room None
Management Number of Available Monthly
(RevPAR)
Rooms

Total Number of
Bookings divided by
Average
Guest the Total Number of Off-Peak
Booking Lead Monthly
Acquisition Days between Periods
Time
Booking and Check-
in

Total Marketing &

Customer Advertising Spend
Guest
Acquisition divided by the None Monthly
Acquisition
Cost (CAC) Number of New
Guests Acquired

Guest Repeat Guest Number of Returning None Monthly

Retention Rate Guests divided by

KPI 1
 KPI
KPI Category KPI Name Filter Period
Description/Formula
the Total Number of
Guests

Interpretation:

Occupancy Rate, ADR, and RevPAR: These KPIs together provide a

comprehensive view of room revenue generation. Increasing any or all of these
metrics translates to higher revenue.

Average Booking Lead Time: A shorter booking lead time during off-peak
periods indicates an opportunity for targeted last-minute promotions to increase
occupancy.

Customer Acquisition Cost (CAC): This KPI helps us understand the cost of
acquiring new guests. Lower CAC signifies a more efficient marketing strategy.

Repeat Guest Rate: A higher repeat guest rate indicates satisfied customers
and a loyal following. This translates to lower marketing costs and potentially
higher spending per guest.

Benefits for Stakeholders:

By tracking these KPIs, stakeholders can:

Revenue Managers: Optimize pricing strategies, identify promotional

opportunities, and forecast revenue.

Marketing Teams: Target marketing campaigns more effectively and measure

their impact on guest acquisition costs.

Hotel Management: Make informed decisions about resource allocation and

track overall revenue performance against goals.

Remember, this is not an exhaustive list, and additional KPIs can be incorporated
based on specific business needs. The key is to choose measurable KPIs that
provide actionable insights to maximize revenue throughout the year.

KPI 2