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Financial Reporting for Revenue Management

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Average Daily Rate (ADR)

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ADR measures the average rental income per paid occupied room in a given time period. It is crucial for understanding pricing strategies and predicting revenue.

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Occupancy Rate

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This metric shows the percentage of available rooms occupied at a given time, directly affecting the potential revenue to be earned by the property.

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Revenue Per Available Room (RevPAR)

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RevPAR combines ADR and Occupancy Rate to give a snapshot of performance. It's a key metric for evaluating how well a hotel is filling its rooms and at what average rate.

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Gross Operating Profit Per Available Room (GOPPAR)

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GOPPAR reflects the profitability of a hotel, taking into account not just revenue but also operational costs for available rooms.

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Total Revenue Per Available Room (TRevPAR)

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TRevPAR measures total revenues generated from all hotel services (rooms, F&B, spa, etc.) per available room, indicating overall earning potential.

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Food and Beverage Revenue (F&B Revenue)

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Tracks revenue from food and beverage sales, important for properties where dining contributes significantly to overall earnings.

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Net Room Revenue

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Represents the total income from room sales after deducting allowances for discounts, complimentary stays, and room cancellations.

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Market Penetration Index (MPI)

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MPI compares a hotel's occupancy rate with the aggregate occupancy of the comp set (competitive set). It indicates if a hotel is capturing its fair share of the market.

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Average Rate Index (ARI)

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ARI compares the ADR of a hotel to the ADR of its competitive set, showing how well a hotel is priced compared to competitors.

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Revenue Generation Index (RGI)

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Indicates how a hotel's RevPAR compares to its comp set. A strong RGI means a hotel is capturing more than its expected share of revenue.

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Cost Per Occupied Room (CPOR)

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CPOR helps in understanding the cost associated with each sold room and is used for managing budgets and profitability.

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Breakeven Point

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The breakeven point identifies how much revenue needs to be earned to cover the total fixed and variable costs of running the hotel.

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Contribution Margin

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This metric shows the remaining revenue after variable costs are deducted, contributing to the coverage of fixed costs and profit generation.

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Variable Costs

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Costs that change with the level of output or occupancy, such as utilities and housekeeping salaries, directly affecting profitability margins.

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Fixed Costs

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Expenses that do not change in total regardless of the number of services provided or the level of occupancy, such as rent and insurance.

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