It’s time for the hospitality industry to start rethinking how it measures success. That means looking beyond revenue and making hotel profitability the goal.
Consider the performance of New York hotels in Q4 2019. According to HotStats data, RevPAR dipped by 4.3% YOY, but the true financial cut went much deeper. Labor costs jumped 1.7% on a per-available-room basis and 2.1 points as a percentage of total revenue. As a result, profit took a dive. Gross operating profit per available room (GOPPAR) tumbled by 10.1% YOY.
Profitability tells the true story of a hotel’s financial health. And there are proven techniques to improve it.
Here’s how to maximize hotel profitability in five simple steps:
1. Hire Profit Managers
Revenue managers have long been a staple of hotels—tasked with generating revenue by any means necessary. This is well and good, but if only a small portion of that revenue flows down to the bottom line, then what’s the point? Hotel owners aren’t pa…
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