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Why general managers should focus on RevPOR

What is RevPOR?

RevPOR stands for revenue per occupied room. It measures the average revenue stemming from optional sales that guests may purchase during their stay.

It is calculated with the following formula:

RevPOR = Total revenue / occupied rooms

The total revenue figure can be adjusted in regards to what it includes/excludes and the time frame, depending on what kind of insights the hotel is looking for. For example, it can be expanded out to include all F&B, parking or even services such as golf, and range from a daily to annual average.

 

RevPOR vs RevPAR

Unlike RevPAR (revenue per available room) which is highly-sensitive to seasonal fluctuations, RevPOR is not directly linked to seasonality and can be a better indicator of how a hotel is managed.

This makes it a useful KPI to compare hotels within a group – or a KPI which general managers should monitor closely.

For general managers operating a property within a chain, the factors which affect their properties’ RevPAR may largely be out of their control. These factors include the time of year, room rate, the brands digital or booking strategies. It can, therefore, make sense for GMs to focus on measuring and improving their RevPOR if they want their hotel's performance to stand out from their sister properties or competitors.

 

Upselling / Cross-selling

A helpful way of thinking about RevPOR is as a measure of a hotel’s upselling or cross-selling capabilities. The more effective a hotel is at securing additional sales, the higher the RevPOR figure will be.

As is often the case, the process of measuring a KPI alone can unlock interesting and potentially lucrative insights into how and why guests purchase additional services. For example, a hotel may notice that its RevPOR is, in fact, sensitive to seasonality, as during the summer, room service and lobby bar sales decrease. The guest is of course still eating and drinking – it just isn’t in their room, but if it is outside of the property, it is lost revenue. In order to maintain or increase its RevPOR during the summer, the hotel may wish to expand its outdoor F&B offering or look into mobile ordering as a route to capturing more and more potential transactions. Regardless of the strategy, a GM’s foremost long term goal should be maximising the revenue per guest. Dollar for dollar, this additional revenue is likely to be cheaper to secure than new business. Comparing the RevPOR figures year on year will tell GMs whether their upselling strategies are effective.

 

To learn more about how mobile ordering boosts hotel revenue, review our mobile ordering statistics from our live venues. For more information on boosting your RevPOR figures with Mi-Room’s any-device, app-free mobile ordering for your hotel, please email [email protected] or contact us here. Our fully-brand customisable platform can integrate all of your food, drinks and hotel guest services into one easily accessible user interface.

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