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Financial Reporting for Revenue Management
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Revenue Generation Index (RGI)
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.
Fixed Costs
Expenses that do not change in total regardless of the number of services provided or the level of occupancy, such as rent and insurance.
Food and Beverage Revenue (F&B Revenue)
Tracks revenue from food and beverage sales, important for properties where dining contributes significantly to overall earnings.
Average Daily Rate (ADR)
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.
Breakeven Point
The breakeven point identifies how much revenue needs to be earned to cover the total fixed and variable costs of running the hotel.
Average Rate Index (ARI)
ARI compares the ADR of a hotel to the ADR of its competitive set, showing how well a hotel is priced compared to competitors.
Gross Operating Profit Per Available Room (GOPPAR)
GOPPAR reflects the profitability of a hotel, taking into account not just revenue but also operational costs for available rooms.
Market Penetration Index (MPI)
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.
Total Revenue Per Available Room (TRevPAR)
TRevPAR measures total revenues generated from all hotel services (rooms, F&B, spa, etc.) per available room, indicating overall earning potential.
Revenue Per Available Room (RevPAR)
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.
Cost Per Occupied Room (CPOR)
CPOR helps in understanding the cost associated with each sold room and is used for managing budgets and profitability.
Variable Costs
Costs that change with the level of output or occupancy, such as utilities and housekeeping salaries, directly affecting profitability margins.
Occupancy Rate
This metric shows the percentage of available rooms occupied at a given time, directly affecting the potential revenue to be earned by the property.
Net Room Revenue
Represents the total income from room sales after deducting allowances for discounts, complimentary stays, and room cancellations.
Contribution Margin
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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