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Modern hotel management requires a robust set of tools and metrics to evaluate and continuously optimize revenue performance, especially in relation to competitors. In this article, we explore what ARI is and how to use it to improve revenue performance.
What is hotel rate management? Hotel rate management is the process of strategically pricing rooms to attract guests while also maximising revenue. This process requires continuous analysis of market trends, booking patterns, and competitor strategies. Table of contents Why does hotel rate management matter?
Pricing Strategies to Optimize Your Hotel Revenue Value-based pricing Package pricing Captive product pricing Market-penetration pricing Psychological pricing Promotional pricing Dynamic Pricing to Ace Your Strategic Game Why Is It Important to Set Pricing Strategies? This is the only way to make it win its place in the market.
MarketPenetration Index (MPI) MPI compares your property’s occupancy to your competitive set. It reveals how well you are performing in terms of capturing demand in your market segment. Gross Operating Profit Per Available Room (GOPPAR) Unlike RevPAR, GOPPAR considers all operating revenues and expenses.
For example, you might set out to achieve a revenue lift of 10% year-on-year. There are many metrics that support revenue KPIs. Consider the following when actioning a revenuemanagement strategy: RevPAR – Revenue per available room gives you an idea of your ability to fill your rooms at an average rate.
These metrics encompass a wide range of areas, from financial figures like revenue per available room (RevPAR) and average daily rate (ADR) to operational aspects such as occupancy rates and guest satisfaction scores. MPI – Marketpenetration index is a way to directly compare yourself with your competitors.
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