As is the case with any business, the operation of a hotel requires hard work and continuous analysis. In order for hotels to be competitive and offer the best services, they need to evaluate their performance throughout the year and compare it with their competitors.


Hotel metrics or Key Performance Indicators (KPIs) are one of the best ways to assess what is going well and what is not. This way, you can make the appropriate adjustments and make smart decisions.


Let’s look at some important hotel metrics below, such as occupancy rate, income per available room, and how you can calculate them.

What are hotel metrics?

Hotel metrics help examine overall performance of a hotel, set business goals, determine what success looks like for the particular property, and monitor its progress.


These metrics can be more general or specific to an industry, sector, or a particular advertising campaign. But what are the most important metrics to pay attention to? Let’s see below.

Important hotel metrics and how to calculate them

Some of the important hotel metrics worth monitoring regularly include:


Occupancy Rate


The Occupancy Rate is one of the most important indicators for a hotel. Essentially, it shows the number of rooms occupied compared to the total number of rooms available. The higher the occupancy rate, the more occupied the hotel is. By measuring this, you can see critical patterns in how your reservations fluctuate throughout the year. To calculate this rate, you should perform the following division:


Number of Room Reservations / Total Number of Rooms


To improve this rate, follow these steps:


  • Create offers and packages for the low season.
  • Use technology such as Canary Contactless Check-In and Checkout to record information, as well as guest reviews and 5-star ratings. This allows you to create more effective marketing campaigns and encourage new guests to book rooms.
  • Collaborate with local organizations such as Convention and Visitors Bureaus (CVBs) or Destination Marketing Organizations (DMOs).

Average Daily Rate (ADR)


The Average Daily Rate (ADR) measures the average revenue generated by rooms booked over a given period, excluding complimentary or vacant rooms. ADR is an important tool for improving hotel performance and is taken into account in Revenue Per Available Room (RevPAR). While RevPAR is based on all available rooms, ADR focuses only on sold rooms, reflecting demand. To calculate ADR, you should perform the following division:


Average Revenue / Number of Rooms Sold


To improve your hotel’s ADR, you should:


  • Increase daily room rates by offering unique or luxurious amenities.
  • Promote demand for your accommodation and services through advertising.

Revenue Per Available Room (RevPAR)

To find Revenue Per Available Room (RevPAR), both ADR and occupancy rate are used. The goal of thisĀ 

measurement is to find the performance and potential losses or gains over a given period. This ratio can be compared with the competition, allowing you to better assess your performance, marketing campaigns, and offers. To calculate RevPAR, you should perform the following calculation:


Room Revenue / Available Rooms or Average Daily Rate x Occupancy Rate


To improve your hotel’s RevPAR, you can follow these steps:


  • Understand demand patterns and find ways to increase demand during low-demand periods.
  • Implement minimum stay policies for guests booking through promotional packages.
  • Offer room upgrades and use digital sales enhancement tools to increase hotel revenue from room bookings.

Gross Operating Profit (GOP)


Gross Operating Profit (GOP) refers to a hotel’s profits after deducting operating expenses across all departments. This indicator evaluates a hotel’s operational efficiency. At the same time, it helps in better identifying expenses and revenues. To calculate GOP, simply perform the following subtraction:


Gross Operating Revenue – Gross Operating Expenses


To improve your hotel’s GOP, consider the following:


  • Reduce expenses in departments such as housekeeping by using technological tools like automated check-in and checkout, which help staff work more efficiently.
  • Find cheaper suppliers or labor-saving technology to reduce the cost of your services without changing the price.

Gross Operating Profit Per Available Room (GOPPAR)


Gross Operating Profit Per Available Room (GOPPAR) measures the relationship between a hotel’s revenue and expenses based on available rooms. Unlike RevPAR, this indicator provides a clearer picture of a hotel’s profitability, as it takes into account both revenue and operating expenses across all departments. To calculate GOPPAR, consider the following:


Gross Operating Profit (GOP) / Total number of available rooms


To improve your hotel’s GOPPAR, you can take the following actions:


  • Focus on how you can improve factors such as staff tasks and cleanliness, as these factors can impact expenses.
  • Use GOPPAR to determine how well you handle low-demand periods. Then find ways to increase business activity during these times.


Thus, we see that hotel performance metrics are quite important as they provide knowledge and information that can help you become more competitive. Indeed, making decisions based on these metrics can help you achieve your goals and stand out from your competition.


Contact us to help you understand, evaluate these metrics, as well as improve your hotel’s performance.