Running a hotel, B&B or concierge business is a bit like juggling several plates. Between satisfying customers, managing reservations and maintaining your profit margins, it’s easy to lose sight of what’s really important. Fortunately, performance indicators (or KPIs, for short) are there to guide you like a GPS through the hospitality jungle.

What are performance indicators and why are they crucial?

A performance indicator is a key measure that enables you to calculate the effectiveness of your actions. In other words, it’s the tool that tells you if you’re on the right track or if what you’re doing isn’t beneficial. For hotels, B&Bs and concierge services, these indicators are essential for :

  • Identify what works (and what doesn’t).
  • Make informed decisions.
  • Optimize your revenues and reduce your costs.
  • Satisfy your customers (and win their loyalty!).

Essential hospitality KPIs

1. Occupancy rate (TO)

Why is this important?
Your occupancy rate measures the percentage of rooms or accommodations occupied over a given period. If your TO is low, it’s time to rethink your marketing strategies or pricing.

How do you calculate it?

Let’s do a little math, but I promise it’s simple! Occupancy rate = (Number of rooms occupied divided by total number of rooms available)×100. Tip: To boost this KPI, consider off-season promotions or partnerships with local agencies.

2. Average price per room (ADR)

ADR, or Average Daily Rate, indicates the average revenue generated per room rented. It is useful for evaluating the performance of your rate strategy.

Formula :

ADR = Total room revenue divided by Number of rooms sold

Why ADR?
It lets you know if you’re selling your rooms at fair value. If your ADR is too low, it may be time to readjust your prices or offer additional services to increase perceived value.

3. Revenue per available room (RevPAR)

This is undoubtedly one of the most important KPIs in the hotel industry. RevPAR combines occupancy rate and ADR to assess your establishment’s overall performance.

Formula :

RevPAR = ADR×Occupancy rate

Case in point:
If your ADR is €100 and your occupancy rate is 75%, your RevPAR will be €75. Simple, isn’t it?

4. Cost per reservation (CPR)

This KPI helps you understand how much you spend on each reservation you make. This includes commissions from platforms like Booking.com, your advertising spend, etc.

Why is this crucial?
A CPR that’s too high can eat into your profits. Always compare your CPR to your ADR to ensure that your margins are optimal.

5. Guest Satisfaction Score

In hospitality, customer satisfaction is king. Positive reviews boost your bookings, while bad feedback can scare off future customers.

How do you measure it?
Analyze ratings on platforms such as TripAdvisor, Google or Booking.com. Also use post-stay surveys to gather more detailed feedback.

6. Average length of stay (LOS)

Longer stays often mean more revenue per customer. Tracking average length of stay helps you identify trends and adapt your offers (e.g. discounts for longer stays).

7. Customer loyalty rate

A loyal customer costs less to retain than a new customer to acquire. Tracking this KPI allows you to measure the effectiveness of your loyalty efforts. Tip: Loyalty programs, personalized surprises and impeccable service can make all the difference.

Special features for B&Bs and concierge services

B&Bs and concierge services have their own challenges. Here are some specific KPIs to watch out for:

1. Direct booking rate

Third-party platforms often charge high commissions. Tracking the direct booking rate allows you to evaluate the effectiveness of your website and marketing campaigns.

How can we improve it?
Highlight the advantages of direct booking (discounts, small gifts, flexibility).

2. Website conversion rate

If many visitors are arriving on your site but few are booking, it’s time to rethink your design or booking process.

3. Response time to requests

In a concierge service, responsiveness is crucial. The faster you respond, the more satisfied your customers are.

Optimize your KPIs with the right tools

To track these indicators without pulling your hair out, invest in the right tools. Here are a few popular options:

  • Channel Managers to manage your reservations and synchronize your calendars.
  • Analysis tools like Google Analytics to monitor your online performance.
  • Hotel CRM to centralize customer information and personalize your approach.

Tips for boosting your KPIs

  • Analyze regularly: Once a month, review your KPIs and adjust your strategy if necessary.
  • Involve your team: Your employees are your best allies. Share objectives with them to motivate them.
  • Be creative: Test new offers, events or partnerships to attract more customers.

Conclusion: KPIs are your best allies!

Tracking the right performance indicators is like having a treasure map for your business. It helps you identify areas for improvement, optimize your revenues and, above all, guarantee an exceptional experience for your customers. Would you like to find out more about how to enhance your establishment? Take a look at our article on Hotel stars in all their glory.