Actions That Can Ruin RevPAR at Your Hotel
Are you looking to improve your hotel’s performance?
If yes, you must improve your revenue management and seek ways to increase hotel RevPAR.
Don’t worry. We got you covered.
Revenue per available room or RevPAR is a significant metric used to measure hotel performance. It’s calculated by multiplying a hotel’s average daily room rate by its occupancy rate. It can also be calculated by dividing a hotel’s total room revenue by the number of available rooms at a specific time.
With hotels recording an 8.3% YoY decrease in RevPAR, you must be aware of different actions that can help you avoid the decrease in RevPAR and ensure you improve your business results and revenue generated per available room.
So, without further ado, let’s understand the basics.
What is RevPAR in the Hospitality Industry?
Hotel RevPAR stands for hotel revenue per available room. Besides the ADR hotel revenue, RevPAR is the most used metric by hotel revenue management experts. It provides a detailed description of the hotel’s performance and minimizes the hassle of understanding the business results.
The RevPAR results highlight the efficiency of the hotel in filling the rooms at an average rate. But being in a result-oriented industry, you should not rely on one KPI when assessing your hotel’s performance.
RevPAR and ADR can help you access the hotel’s profitability accurately and clearly show your success rate over a specific time.
How to Calculate RevPAR?
RevPAR calculation is straightforward if you know the RevPAR formula in hotel. You can use the most commonly used formula RevPAR = Total Room Revenue / Number of Available Rooms to get accurate results and increase hotel RevPAR.
You can also use another formula to calculate RevPAR (RevPAR = ADR * Occupancy Rate), where ADR is the average daily rate or the money your hotel generates per occupied room per day.
You can calculate ADR using the formula ADR = Room Revenue in a Day / Number of Sold Rooms.
But the manual calculation using the RevPAR formula in hotel industry can be time-consuming and ineffective. You can integrate professional revenue management software like AxisRooms to get instant results for improving your hotel business operations and increasing your RevPAR.
RevPAR in hotel industry is highly important to ensure business profitability. Here are some things to avoid when implementing strategies to increase RevPAR.
Actions to Avoid if You Want to Increase RevPAR
Increasing your RevPAR is the ideal situation you should achieve, but specific actions can hinder your desires and result in a decreased RevPAR. You should avoid multiple actions, but we have filtered the most common and effective points.
Ignoring your online reviews
Ignoring your online reviews shrinks your chances of hotel room occupancy, delivers a poor guest experience, and minimizes your RevPAR.
Once a guest highlights their concerns on different online communication channels, your team should provide personalized answers to boost the relationship and leave a positive brand image in the customer’s mind.
Ensure the customer feedback is taken seriously, and you implement the suggestions and feedback in your hotel operations to increase the chances of future room booking and your RevPAR.
Not leveraging digital marketing
In the modern era, where customers want everything at their fingertips, not taking advantage of the digital ecosystem can lower occupancy and decrease your RevPAR.
You must leverage the power of digital marketing and increase your reach and visibility to strengthen your presence in the industry. Ensure you manage and link with different OTAs to get an extra edge over others with an increased possibility of getting a room booking request.
Not offering a loyalty program
To avoid a decrease in RevPAR, focus on building a loyal customer base and improving client retention. Ensure you integrate a loyalty program where you offer specific offers and discounts to your loyal guests to increase RevPAR and the hotel’s occupancy and outshine your competitors in the industry.
Not focusing on high cancellation rates
Hotel revenue RevPAR can get a drastic hit if you don’t focus on the high cancellation rates. You must improve and optimize your guest onboarding process to increase the occupancy rates.
Implement professional strategies to ensure you minimize cancellation rates and boost guest retention for long-term growth.
Not changing the room rate plan
Changing the price based on the length of the stay, season, and other vital factors is one of the best strategies to increase RevPAR. You should ensure you have integrated the best revenue management software to get the best pricing.
Now that you know the steps to avoid increasing RevPAR, let’s look at tips to increase your RevPAR.
Ways to Increase RevPAR
Multiple ways can increase RevPAR, but we have filtered the best strategies to ensure success.
Data-driven SEO strategy
Utilize the potential of organic marketing to increase your presence on the internet. Following the right on-site and off-site SEO strategies can ensure you increase your reach and visibility in the hotel industry to attract more inquiries and bookings.
SEO can create an organic guest pipeline to ensure you have a steady flow of revenue and profitability.
Boost direct bookings
You should encourage direct booking from your online website, social media, or other platforms to avoid the interference of third-party like OTA platforms or agents. It can boost your profitability and ensure you get the best room occupancy rate from your guests.
But you can’t avoid listing on different OTA platforms because of the popularity of these platforms among travelers to compare pricing and get the best deals for their travels.
Integrate a channel manager
You must integrate a professional channel manager that can handle your pricing updates across different online platforms and ensure uniformity in your room pricing. It can deliver a quality customer experience, increase room booking and help you increase hotel RevPAR.
Revenue management solutions
Also, use professional revenue management services for hotels from leading service providers like AxisRooms. You can get detailed insights about your competitors’ pricing, powerful reporting, and other effective features to improve your hotel business operations and achieve the desired business outcome.
You can use hotel revenue management services to analyze your business performance using different metrics like KPIs like ADR, revenue, occupancy, and RevPAR.
Now you decide to implement the right strategies to increase hotel RevPAR.
AxisRoom is Your Go-To Solution
AxisRooms offers a tailored suite of products for the hospitality industry to handle your hotel operations, irrespective of the niche and scale of your operations.
You can use AxisRooms to access tools like the booking engine, vacation rental software, property management system, channel manager, revenue management system, and rate shopper to boost the quality of guest experience.
You can use the revenue management solutions hotel provided by AxisRoom to ensure you manage your expenses and revenue with finesse and streamline your business operations to achieve the desired outcome.
With quality 24*7 customer support, our team can assist you in solving daily issues and problems to help clear the blockage in your business workflow. The RM as Service ensures maximum efficiency and unlocks your true business potential.
Get access to hands-on revenue management as service experience and transform your existing business ecosystem while increasing your RevPAR.