Hotel Finance Strategy

Managing labor costs is a never-ending battle in any hotel. No wonder it adds up to on average 50 percent of the total revenue in hotels around the world.

A lot has been speculated about what could and should change because of the pandemic. There is one aspect of the hotel business that desperately needs to change and the Covid crisis is not to blame. However, it will most certainly speed things up.

I do not know about your experience, but for me growing up in the hotel world, and especially my first decade working in F&B and rooms, the adage, “Look after the guests and the money will look after itself,” was literally beat into my head.

If you only use RevPAR index, then you are missing the bulk of the story. From time immemorial, revenue per available room, or RevPAR, has been the go-to key performance indicator in the hotel industry.

Over the many years I have worked in hotels, I have had the pleasure of working with some exceptionally fine and talented individuals. This story is about one GM and his penchant for simplicity.

For a long time now in the hotel business we have been using REVPAR index to measure how effective our sales, marketing and revenue management strategies are. In this piece, I am going to talk about what I think should come next. I do not know about you, but I can remember when we did not use and compare…