There are many different ways to measure progress, performance and success. At a hotel, there are essential metrics to track, and it is typically up to a general manager to decide not only which metrics should be tracked, but also how they can be tracked.
Most of the essential metrics that general managers keep track of are the key performance indicators (KPIs) for the hotel. Measuring some of your hotel’s KPIs might be as simple as calculating your hotel’s average daily rate (ADR), but when it comes to other KPIs such as employee performance, or the speed of operational teams, those can be harder to measure.
Hotel operations software can help hotel owners and managers track many of the essential hotel metrics and KPIs that keep a hotel running smoothly and efficiently. As a hotelier it is important to use metrics like these as KPIs for teams, individuals and overall business performance. Here are a few hotel metrics that should be tracked:
Guest Satisfaction (NPS scores)
How happy your hotel guests are is something that most hotel employees and management have an idea of with the direct feedback they observe and receive from hotel guests during their stay. If guests are generally satisfied and pleased with their stays, they’ll mention it when asked at check-out. Satisfied guests may also be more likely to leave tips for housekeeping in their guest rooms, and answer the most basic question “How was your stay?” positively.
Spotting an unhappy guest is also equally easy. If you’ve ever worked in a hotel, you know that unhappy guests aren’t afraid to express their dissatisfaction with services, staff, cleanliness, or just about anything else that doesn’t meet their expectations.
But how do employees and hotel managers gauge guest satisfaction if they aren’t at a hotel’s physical property? Online reviews are clear indicators of how satisfied guests are, but asking guests to complete an internal post-stay online survey is a great way to solicit feedback in a controlled setting.
Use guest messaging tools to reach out to guests, asking them to give feedback. Guests aren’t always likely to provide unsolicited feedback, but asking them directly via text or email, and giving them an easy way to respond, can be a great option. Your hotel’s net promoter score (NPS) is an essential metric for all hoteliers to track.
As a result of COVID-19, many hotels are not staffed in the same ways that they were pre-pandemic. Lean teams mean that employees are forced to wear multiple hats, and that every role they fulfill and task they complete must be impactful.
Operational software tracks every single click of who did what, when, and where. The robust reporting features in hotel management software enable managers to see which employees are going above and beyond, are working the most efficiently, and overall good team productivity. The information that is pulled from these reports can highlight superstars or unearth areas where new processes might need to be introduced, or more training needs to be completed.
How productive your employees are is an important metric for general managers to track so that the most impactful work is done at all times, saving time and money, as well as positively the guest experience.
ADR (Average Daily Rate)
ADR is one of the most common acronyms used in hotels, and it is also one of the most basic. General managers can usually tell you their ADR without having to consult anyone or anything. ADR represents how much money, on average, the hotel receives per rented room.
ADR only looks at rate per sold room, so a hotel selling one room at $300/night has an ADR of $300. This metric is like judging a book by its cover, only a surface evaluation of success.
Hotels report ADR net of advance fees, like Online Travel Agency (OTA) prepay charges, where OTAs send a net rate to the hotel, removing their commission in advance. For example, if the OTA rate is $300 on a prepaid rate, the rate sent to the hotel has the commission subtracted in advance, so it might be $240 if the commission is 20%. However, if the rate is collected at the hotel, the full rate is reported, so $300.
Capital expenditure (CapEx) is an essential metric that has a significant impact on your hotel’s bottom line. Tracking your hotel’s annual CapEx is important, as is being able to accurately forecast and estimate it.
Unexpected maintenance or repairs can have a huge impact on your hotel’s CapEx. Preventative maintenance software helps hotels manage their CapEx, and catch problems before they affect your hotel’s bottom line. With preventative maintenance software helping maintenance and facilities teams consistently manage maintenance over a specific period of time, it is more likely that regular maintenance can help prevent costly replacements. Proactive maintenance, instead of reactive maintenance will always have a positive impact on a hotel’s financial performance.
Your hotel’s flash report shows many of these important metrics in one place, and also provides historical data (one year to date, one week to date, etc.) for many of these metrics. Managing a hotel requires visibility and insight into your hotel’s operations from every angle. Understanding these performance metrics, and how to measure them, is important for every general manager in the hotel industry.