Advanced KPIs Every Hotelier Needs to Track - and How to Optimise Them

Why track it?

Not all booking channels contribute equally to your bottom line. While Gross Revenue by Channel offers surface-level insights, analysing the Contribution Margin per channel (factoring in commissions, marketing spend, and operational costs) provides a clearer view of profitability.

How to improve it:

• Comprehensive cost analysis: Map out the exact costs per booking channel, including OTA commissions, advertising spend, and technology fees. For example, assess whether certain OTAs demand higher connectivity fees compared to others and evaluate their ROI.
• Target high-margin segments: Use Guest Management tools to identify guest profiles with higher spending patterns, such as business travellers booking premium rooms, and design targeted campaigns (e.g., bundled rates with breakfast or high-speed Wi-Fi).
• Budget reallocation: Conduct A/B tests with marketing spend. For instance, reduce OTA ad spend by 10% and redirect it to Google Ads campaigns optimised for direct bookings. Measure how this shift affects overall profitability.

Why track it?

RevPAG evaluates not only room revenue but also all other revenue streams generated by guests (e.g., F&B, spa, parking, etc). This metric highlights how much value each guest adds to your hotel.

How to improve it:

• Personalised upselling: Leverage pre-arrival emails to suggest room upgrades or spa packages tailored to the guest’s profile. For instance, a couple on their honeymoon could be offered champagne on arrival and a private dinner experience.
• Dynamic pricing for ancillary services: Use real-time occupancy data to adjust prices for services like spa treatments. Example: Offer 20% off massages during weekday afternoons to fill underused slots.
• Seamless payment collection: Facilitate payments for additional services by sending secure payment links to guests, ensuring a smooth and efficient process.

Why track it?

GOPPAR accounts for operational costs, providing a clear picture of a hotel’s efficiency and profitability. It’s a critical metric in times of rising costs.

How to improve it:

• Energy-efficient technologies: Install smart thermostats in rooms to optimise energy use based on occupancy. Example: Reduce heating in unoccupied rooms by 20%.
• Enhanced Operational Tools: Implement digital solutions to streamline front-desk operations. Complement these with staff scheduling and organisational tools to reduce the time spent on repetitive tasks, allowing staff to focus on higher-value guest interactions. Example: Online check-in systems can decrease check-in times by up to 50%, freeing up resources during peak periods.

• Revenue-based staffing models: For F&B outlets, align staffing levels with projected covers per meal period rather than occupancy rates. This approach ensures better control of payroll costs.

Why track it?

NPS reflects guest satisfaction, loyalty, and likelihood to recommend your property. A high NPS often correlates with increased direct bookings and repeat visits.

How to improve it:

• Proactive guest engagement: Use in-stay surveys via your CRM to address issues before guests leave. For example, a guest reporting lukewarm water can have their complaint resolved immediately, leaving them with a positive impression.
• Loyalty programme enhancements: Offer exclusive perks for returning guests, such as late checkouts or room upgrades. For instance, create a tiered programme where guests earn points redeemable for premium experiences.
• Detailed NPS segmentation: Analyse NPS by room type or booking channel. Example: If business travelers from GDS consistently report lower satisfaction scores, offer tailored perks such as early check-in, high-speed Wi-Fi, or quiet-zone rooms to enhance their experience.

Why track it?

Lead time analysis helps identify booking behaviour trends, allowing for precise pricing and campaign timing.

How to improve it:

• Customised offers based on lead times: Create time-sensitive campaigns for specific segments. Example: Offer “book now, save later” discounts for early bookers or “last-minute weekend getaway” deals to attract impulsive travellers.
• Adjust inventory strategies: Use lead time data to allocate inventory more strategically. For instance, set aside premium rooms for shorter lead times, as last-minute guests are often less price-sensitive.
• Refine cancellation policies: Shorten the cancellation window for last-minute bookings, reducing the risk of unsold inventory.