Revenue Per Available Room - RevPAR
Categories: Metrics
Ok, the keyword here is "available." We're thinking about a 100-room hotel with a "rack rate" of $200 a night. So what rooms wouldn't be "available"? Well, what about comped "free" rooms, given to whales (people who spend a lot of money at the casino, or for, um, company...or drinks at the hotel)? What about rooms under construction? What about rooms being de-funked for that last Rock 'n' Roll High School reunion party? And why does this even matter as a metric anyway?
Well, for many hotel managers, a big part of their compensation comes from this number. Like...the hotel owner wants to be sold out and maximize their revenues. But if you get to "sold out" status by dropping the price to $22.95 a night on Priceline, then you've gamed the system. So this metric tracks that stat, and also accounts for the situation where a hotel is undergoing big construction, not punishing the manager's stats by just having a revenue bogey out there. And you don't want a bogey at this hotel's course.
