ROOMSDIV- Key Operating Ratios

Question 1

Measures the percentage of available rooms occupied over a period, indicating how well the hotel is filling its rooms.

Answer 1

Occupancy Rate (%OR)

Question 2

Occupancy Rate

Answer 2

room sold/ rooms available (100)

Question 3

It reflects the average revenue generated per occupied room and is useful for evaluating pricing strategies.

Answer 3

average daily rate (ADR)

Question 4

average daily rate (ADR)

Answer 4

rooms revenue/ rooms sold

Question 5

Combines occupancy and ADR to assess the hotel’s revenue generation capability.

Answer 5

revenue per available room (RevPAR)

Question 6

RevPAR (revenue per available room)

Answer 6

1. rooms revenue/ rooms available
2. occupancy rate (ADR)

Question 7

Shows the average number of nights guests stay, aiding in guest retention analysis.

Answer 7

ALOS (average length of stay)

Question 8

ALOS (average length of stay)

Answer 8

room nights sold/ no. of reservations

Question 9

Provides a profitability measure by considering both revenue and costs.

Answer 9

GOPPAR (gross operating profit per available room)

Question 10

GOPPAR (gross operating profit per available room)

Answer 10

gross operating profit/ rooms available

Question 11

Shows the cost of servicing each occupied room, guiding expense management.

Answer 11

CPOR (cost per occupied )

Question 12

Measures how frequently rooms are vacated and re-occupied, indicating housekeeping efficiency.

Answer 12

room turnover rate

Question 13

room turnover rate

Answer 13

no. of checkouts/ rooms available

Question 14

importance of analyzing ratios for decision-making

Answer 14

maximize revenue
cost control (reduce expenses without compromising quality)

Question 15

it helps identify areas for operational improvement.

Answer 15

key operating ratios

Question 16

it helps hotels develop strategies to enhance guest satisfaction and increase overall profitability.

Answer 16

key operating ratios

Question 17

___ is a strategy used by hotels to manage their EMPLOYEE expenses efficiently.

Answer 17

labor cost control

Question 18

the largest expense in hotel operations

Answer 18

labor costs (50%)

Question 19

two (2) components of labor costs:

Answer 19

1. fixed costs
2. variable costs

Question 20

Setting labor cost standards involves ___ against industry averages to measure efficiency and productivity.

Answer 20

benchmarking

Question 21

This is when employees trained in multiple roles can fill in for each other, reducing the need to hire additional staff.

Answer 21

cross-training staff

Question 22

___ is also critical for balancing operational costs with service excellence.

Answer 22

labor cost control

Question 23

GPR (guest per room)

Answer 23

total guests/ rooms sold

Question 24

CPOR (cost per occupied room)

Answer 24

total room department cost/ rooms sold