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KPI for Measuring of Net room revenue per available room (NREVPAR) posted in category Hotels

WinningKPI - Hotels - KPI for Measuring of Net room revenue per available room (NREVPAR) posted in category Hotels Oana Boteanu
The KPI with this visual info-graphic is included in Hotel KPIs pack.
Details:
This indicator is for measuring the net revenue that the hotel earns per available room. The calculation is done by first calculating the net room revenue, which is done by resting from the total room revenue any costs occurred per room (e.g. distribution costs, transaction fees, agent commissions, discounts etc.). After, the net revenue from rooms is divided by the total number of available rooms to obtain the nrevpar.
This is a great tool to show exactly how much profit is made from the room revenue, when costs are deducted. Managers may put in place strategies to minimise costs per room in order to maximise net room revenue per available room (e.g. obtain better deals on room toiletries; achieve a lower Service Cost per room KPI etc.)

Formula:
NREVPAR = Net Room Revenue / Available Rooms

NREV = Rooms Revenue – Total Costs for Rooms (distribution, transaction, agent commissions, discounts etc.)

KPI Units: Money

KPI Time Frame: Update quarterly

Posted by Oana Boteanu | Help to protect community: Flag for moderation

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Here are comments:

KPI Expert Example:
A hotel’s room gross revenue is $65 000 a month
However, $20 000 are spent on total costs (fixed + variable)
NREV= $65 000 – $20 000 = $45 000

The hotel has 150 rooms; however, only 100 have been rented that month.
For the purpose of calculating NREVPAR, the total of 150 available rooms is taken into consideration.
$45 000/ 150 = $300 room revenue per month

If the total rate is $50 per night, that’s an average rent for 6 nights a month (very low, probably a figure for off season) - however, this is net revenue, probably 2 nights rent or more have been used to pay costs.

Oana Boteanu | + | September 8, 2012 at 9:49 am

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