revpar

How to Achieve a Revpar 10% Higher than Your Comp Set

This is an easy one but worth mentioning:

Research has shown that hotels with an ADR significantly lower than that of their competitive set have an inferior Rev-PAR performance (Canina and Enz 2008; Enz and Canina 2004).

This relationship has been shown to hold true across all hotel market levels. For example, in the luxury market, hotels that have an ADR that is higher than their competitive set have the same or slightly lower occupancies, but have a 8- to 14-percent higher RevPAR than their competitive set.

Conversely, hotels that have a lower ADR than their competitive set have about the same to slightly higher occupancy levels, but report a RevPARS of 3- to 9-percent lower than their competitive set (Canina and Enz 2008).

Take-away: Figure out who your real comp set is and then actively manage your ADR to be above them. Measure, rinse, repeat until you get it right.

via [Hotel Revenue Management in an Economic Downturn]

UK cold but London hot

The latest HotStats Report is out from TRIHospitality Consulting.  This shows that hotels in London had an improved performance in 2010, but provincial hotels continue to suffer.  In London occupancy was up 2% on 2009, RevPAR 9%, and Gross Operating Profit by a whopping 14%.  But this is not reflected outside of London, where despite occupancy improving by nearly 2%, RevPAR was only up 1.5% and GOP was actually down 1.5%.  These headline figures mask the fact that the picture is very mixed across the country.  For instance, in December central London hotel performance was down due to travel disruption, poor weather and student protests, whereas Heathrow hotels saw RevPAR rise by 31% for the very same reasons.