ROOMSDIV- Key Operating Ratios Flashcards
Midterms #1
Measures the percentage of available rooms occupied over a period, indicating how well the hotel is filling its rooms.
Occupancy Rate (%OR)
Occupancy Rate
room sold/ rooms available (100)
It reflects the average revenue generated per occupied room and is useful for evaluating pricing strategies.
average daily rate (ADR)
average daily rate (ADR)
rooms revenue/ rooms sold
Combines occupancy and ADR to assess the hotel’s revenue generation capability.
revenue per available room (RevPAR)
RevPAR (revenue per available room)
- rooms revenue/ rooms available
- occupancy rate (ADR)
Shows the average number of nights guests stay, aiding in guest retention analysis.
ALOS (average length of stay)
ALOS (average length of stay)
room nights sold/ no. of reservations
Provides a profitability measure by considering both revenue and costs.
GOPPAR (gross operating profit per available room)
GOPPAR (gross operating profit per available room)
gross operating profit/ rooms available
Shows the cost of servicing each occupied room, guiding expense management.
CPOR (cost per occupied )
Measures how frequently rooms are vacated and re-occupied, indicating housekeeping efficiency.
room turnover rate
room turnover rate
no. of checkouts/ rooms available
importance of analyzing ratios for decision-making
maximize revenue
cost control (reduce expenses without compromising quality)
it helps identify areas for operational improvement.
key operating ratios
it helps hotels develop strategies to enhance guest satisfaction and increase overall profitability.
key operating ratios
___ is a strategy used by hotels to manage their EMPLOYEE expenses efficiently.
labor cost control
the largest expense in hotel operations
labor costs (50%)
two (2) components of labor costs:
- fixed costs
- variable costs
Setting labor cost standards involves ___ against industry averages to measure efficiency and productivity.
benchmarking
This is when employees trained in multiple roles can fill in for each other, reducing the need to hire additional staff.
cross-training staff
___ is also critical for balancing operational costs with service excellence.
labor cost control
GPR (guest per room)
total guests/ rooms sold
CPOR (cost per occupied room)
total room department cost/ rooms sold
