For hotel owners, success lies in focusing on metrics that provide a more comprehensive view of performance. This is where RevPAR’s limitations emerge. While it offers useful insights into room revenue, it doesn’t consider how efficiently a property manages expenses or leverages amenities. Metrics like gross operating profit per available room (GOPPAR) and revenue by length of stay (RevLOS) provide a deeper understanding of a property’s financial health and operational effectiveness.

The relevance of certain metrics varies by hotel type. Limited-service properties have fewer revenue streams. But for full-service hotels and resorts, where multiple revenue centers come into play, expanding beyond RevPAR is essential. This is especially true for resort destinations, where the guest experience — and much of the guest spend — extends beyond the room itself. For example, some resorts offer a plethora of activities. One that Dragonfly Strategists works with regularly has 56 activities ranging from waterparks to ziplining. The entire guest experience drives multiple revenue centers. To truly determine success, resorts needed to track revenue per available guest (RevPAG) and total revenue per available room (TRevPAR).

RevPAG is a crucial metric for gauging the effectiveness of in-room marketing and overall guest engagement. If a resort understands that its spa revenue is underperforming relative to other amenities, it can adjust marketing efforts to target guests who are likely to use the spa.

RevPAR, on the other hand, fails to capture this broader picture by ignoring critical revenue streams such as ski passes, golf courses, and food and beverage. For hotel and resorts with a variety of options, measuring the additional revenue is essential to optimize profitability.

Let’s take a quick look at some more in-depth KPIs

TOTAL REVENUE PER AVAILABLE ROOM (TREVPAR): Goes beyond room revenue to encompass income from all departments, such as food and beverage, spa, and ancillary services.

GROSS OPERATING PROFIT PER AVAILABLE ROOM (GOPPAR): Goes beyond revenue to measure profitability, calculating gross operating profit (GOP) per available room.

REVENUE PER AVAILABLE SQUARE FOOT (REVPAS): Evaluates revenue generated per available square foot, accounting for all usable space in the hotel. You might also hear this as RevPAM, for square meters, if you use the metric system.

NET PROFIT PER AVAILABLE ROOM (PROPAR): Focuses on net profitability, accounting for all expenses and taxes, providing a clear picture of a hotel’s financial health.

GUEST LIFETIME VALUE (GLTV): Measures the total revenue a hotel can expect from a guest throughout their lifetime, including repeat stays, loyalty program engagement, and ancillary spending.

REVENUE PER AVAILABLE GUEST (REVPAG): Calculates revenue generated per guest, focusing on individual spending habits rather than the physical room.

TOTAL REVENUE PER AVAILABLE GUEST (TPAG): Evaluates the total revenue generated per guest, including room charges, dining, activities, and other purchases.

REVENUE BY LENGTH OF STAY (REVLOS): Gauges revenue based on the length of a guest’s stay, providing insights into pricing strategies and stay patterns.‍

Challenges to Change

The world has changed dramatically over the last 40 years. The internet, mobile phones, and advanced technology have revolutionized nearly every industry. Yet the hotel sector is still relying on a metric developed before these advancements existed.

One of the challenges in adopting broader metrics lies in the lack of industry-standard tools. Unlike RevPAR, there isn’t yet a universally accepted system to track and compare this data.

Many companies, including CoStar, Kalibri Labs, Lighthouse, and Hotstats amongst others, are working to develop systems and tools to help measure these additional KPIs. But that doesn’t mean hotels should overlook tracking with the tools and information they already have on hand.

A profit and loss (P&L) statement combined with the right formula can provide incredibly revealing insights. Take RevLOS, for example. Many hotels push for longer stays, but a resort might notice that after day four, guests start venturing off-property. In this case, it would make sense to restrict some stays at four nights and check in new guests who will continue to spend at a higher rate throughout the hotel.

Why encourage seven-night stays if four nights will maximize revenue and profitability? With this information, resorts can shift their efforts toward optimizing bookings. The prospect of implementing new metrics and processes can seem overwhelming, but the solution begins with action. Start by measuring with the tools and resources you already have available. Establish accountability within the management team to ensure these metrics are tracked, analyzed, and used to make informed decisions. By prioritizing these additional KPIs, hotels can gain deeper insights, optimize performance, and drive long-term profitability.

The industry is evolving, and so must the way we measure success. It’s time to move beyond just RevPAR and embrace metrics that truly capture the full potential of what a property can achieve.