RevPAR – Revenue per Available Room – has long been considered a key benchmark for success in the hotel industry. But in a rapidly changing landscape, this metric alone no longer tells the whole story. That’s becoming increasingly clear to revenue experts, tech providers, and hotel groups alike.
But here’s the real question: Are hotels actually ready to rethink their KPIs, when so many still focus primarily on ADR – the Average Daily Rate?
ADR in the Spotlight – But Is It Still Relevant?
ADR is easy to calculate, simple to communicate, and deeply ingrained in how many hoteliers think. But that’s part of the challenge:
ADR says nothing about occupancy, ancillary revenues, or the cost of generating that revenue.
A high room rate might sound good—but if the hotel is half-empty or the margin is eaten up by OTA commissions, the value quickly fades.
RevPAR Was a Step Forward – But Not the End Goal
RevPAR improved on ADR by factoring in occupancy. It gave a fuller picture of room revenue performance. But even RevPAR now falls short in assessing true hotel success.
Here’s why:
- It ignores total guest spend (e.g. F&B, spa, meetings).
- It doesn’t reflect costs like labor, energy, or distribution commissions.
- It misses shifts in guest behavior, like shorter lead times and higher expectations.
New Metrics – But Are We Ready?
Metrics like TRevPAR (Total Revenue per Available Room), GOPPAR (Gross Operating Profit per Available Room), or even WorthPAR (Guest Value per Available Room) are gaining traction. They help hoteliers understand the full value of each guest – and what’s left at the end of the day.
But this brings up a tough reality:
Many hotels lack the data, systems, or mindset to actually track and act on these modern KPIs.
What Hotels Need to Embrace Smarter KPIs:
- Cross-departmental data integration
If F&B, spa, and front office operate in silos, it’s nearly impossible to calculate total guest revenue or value. - Staff education and cultural shift
As long as ADR is seen as the only measure of success, strategic insights fall by the wayside. New KPIs need to be explained, embraced, and regularly discussed. - Technology that enables smarter decisions
Spreadsheets are no longer enough. Modern BI tools or revenue management systems can automate these new metrics and make them accessible in real time.
Bottom Line: Without a Cultural Shift, KPIs Stay Stuck in the Past
Technically, many hotels are ready for smarter metrics. Culturally, many are not.
If your team still celebrates a rising ADR without context, you may be missing the bigger picture.
The shift doesn’t start with systems—it starts with mindset. Once your team understands why ADR alone isn’t enough, they’ll be more open to adopting smarter, more holistic KPIs.
