Key performance indicators (KPIs) are a critical metric for measuring both individual and team performance. In the hotel industry, these measurements can be quite helpful in establishing a production-level normal, whether the job is turning beds or checking in customers. Which performance metrics are better? Here’s what you need to know.
Top KPIs for the Hotel Industry
KPIs set the standard for performance by creating a measurable and hopefully attainable goal for your teams. You can use them in all areas of the hotel industry, from forward-facing client services to back-office operations and everything in between. KPIs help hotel managers and owners make better decisions based on the available data. It helps you understand what the most high-performing teams are capable of, and it gives you a bar to strive for when working with underperforming teams.
Some of the best metrics we’ve seen have included:
- The average daily rate (ADR). Most hotels use this to measure the average amount of revenue collected daily by occupied room. It can track losses on unoccupied rooms. It can even determine how long room turnover takes or if you have peak seasons where occupancy is high. It’s a very useful baseline measurement of overall hotel performance.
- There is also the revenue per available room or the RevPAR. Averaging room revenue for a period of time is a good way to calculate an idea of how much revenue is generated per room. High RevPAR equals high occupancy and a good ADR. To calculate RevPAR, take the average daily rate and multiply it by the occupancy rate. Or, you could multiply the night’s total revenue by the number of rooms available.
- For individual contributors, consider factoring a KPI related to online reviews in addition to their physical activity tracking. For example, you can track the number of check-ins by individuals at the front desk. But that number is one they can’t really control because it’s tied to customer bookings. But any client-facing jobs should be measured against the online review experience. Train your teams in how to politely as customers if they will leave a review about the service you offer. Watch these reviews closely because they will most certainly have an effect on your occupancy rate. You can also track a KPI for individual reviews, if feasible.
- Another KPI to consider is the cost of heating and powering your facility. Energy consumption at hotels has a direct correlation to cost. The data shows energy expenditures are the highest of all costs, making up 60% of your bottom line. It makes sense to track these metrics closely. In the same way that hotels place signage asking guests to reuse towels, small signs encouraging recycling and energy efficiency are all ways to encourage staff and guests to turn off lighting when it’s not being used.
How does a staffing agency like Gecko know so much about hotel KPIs? Gecko Hospitality services the hotel industry by partnering to provide top talent. Talk with our staffing team today about how we can provide you with top performers for your organization.