Braidwood Hospitality Management helps our clients position their hotel at the right rates, targeted at the right group of customers and backed up with a team of qualified hospitality sales managers able to drive occupancy in the slow periods at competitive rates; maximizing rate and revenue in periods of high-demand using Yield Management techniques resulting in increased top-line revenue, improved bottom line and increased profits.
Investors and others determine a hotel’s success and competitiveness using certain market penetration factors. Two of these factors are Average Daily Rate (ADR) and Revenue per Available Room (RevPar). Braidwood Hospitality Management helps our clients, small & medium sized hotels & resorts, establish a rate structure and a Yield Management Strategy designed to grow fair market share, ADR, RevPar and revenue.
Average Daily Rate (ADR)
Average rate is a bi-product of the hotels total daily room revenue divided by the total number of rooms sold that day. Total room revenue is a product of the rooms sold, times the rate established for each of the hotels market segments. It is important therefore, that room rates are positioned competitively to attract customers from all identified market segments. The right blend or market mix will produce the desired ADR.
Revenue Per Available Room (RevPar)
RevPar is one of the most important measurements in the hotel Industry today. RevPar is an acronym that stands for Revenue per Available Room. This is different from average rate in that it is a measure that divides revenue by the number of available rooms, not the number of occupied rooms. It is a measure of how well the hotel has been able to fill rooms off season, when demand is low even if rates are low, and how well they fill the rooms and maximize the rate in high season, when there is high demand for hotel rooms. Who looks at RevPar? A lot of people do, including hotel owners, lending institutions, and management companies.
RevPar example: A hotel with 70 rooms has 25,550 available rooms to sell in a year. If that same hotel achieved an annual occupancy of 75-percent it would have sold 19,163 rooms that year. Assuming in a given year that this hotel has room revenue of $1,300,000 its average rate would be $67.84 and the hotel's RevPar would be $50.88. RevPar is a better measurement because it shows how well the hotel was able to fill rooms (regardless of price) in low-demand periods, and how well they did filling rooms at the highest rate possible when demand is high.
Braidwood Hospitality Management helps our clients position their hotel at the right rates, targeted at the right group of customers and backed up with a team of qualified hospitality sales managers able to drive occupancy in the slow periods at competitive rates; maximizing rate and revenue in periods of high- demand using Yield Management techniques resulting in increased top-line revenue, improved bottom line and increased profits.
