KPI for Measuring of Spend per Head posted in category Hotels
WinningKPI - Hotels - KPI for Measuring of Spend per Head posted in category Hotels
The KPI with this visual info-graphic is included in Hotel KPIs pack.
Details:
This indicator is for measuring the total amount of money spent per customer. It is calculated by dividing the total hotel revenue by the number of guests.
This is a useful indicator to show how much gross revenue the hotel is earning, on average, per guest.
However, as it only indicates the average spent per head, it does not provide accurate details needed for strategic decisions. Hence, in order to obtain a more detailed data, management may choose to look at average spent per type of guests. For instance, they may choose to look at average spent per young couples, per retired couples, per business groups etc.
Formula: Total gross revenue/ Total number of guests
Example: Spend per head over 1 month period for Hotel A:
Total number of guests in one month: 2000
Total hotel revenue that month: $700 000
Spend per head: 700 000/ 2000 = $350
This formula is assuming that a client is spending on average $350 in the hotel. This is a good average measure, and a great KPI to be used as a measure to maximise this figure.
However, if the hotel now uses this measure to decide the nature of a new ‘feature’ to add to the hotel in order to maximise this spend per head, a more in depth analysis is needed.
For instance, if let’s say out of the 2000 guests, 1000 were business clients and 1000 were couples the hotel could calculate:
Spend per head per business client:
Total revenue from business clients/total number of business clients
450 000 / 1000 = $450
Spend per couple:
Total revenue from couples/total number of clients
250 000/ 500 = $500 ($250 per head)
From this figure (highly simplified, hotels would have much more complex figures) the hotel management can see that the spend per head per business client is double than the individual coming with a partner. To increase the spend per couple, the hotel may open a spa facility and create a couple offer package.
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