What is TRevPAR?
TRevPAR stands for total revenue per available room. TRevPAR accounts for all the ways your hotel makes money and applies it back to how many rooms you have.
For example, your hotel will take revenue from all sorts of places including your bar, restaurant, parking, pools and spas, mini bar, massages, exercise classes, gym, retail sales, activity bookings etc.
There’s a lot more money coming in outside of reservations. However, it’s still relevant to track this against your rooms because the money is still being generated from the guests in those rooms.
TRevPAR is a key performance indicator to track on a regular basis at your hotel. Just like other metrics such as RevPAR and ADR, TRevPAR will give you key insights into how revenue is being earned at your property and what you can do to optimise it.
So let’s take a closer look at the meaning of TRevPAR.
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Why should you use the TRevPAR formula?
Since TRevPAR takes into account all revenue of your hotel and relates it back to the number of rooms, you could argue that it provides a better ‘big picture’ view than a metric like RevPAR does.
Especially if you are a larger hotel, different departments such as restaurants, bars, or other amenities can have a big impact on overall business success. TRevPAR is a great way to consider all the factors that generate revenue from guests.
Tracking TRevPAR also allows you to look into how you can gain an edge on competitors or learn more about your guests. If you compare your hotel with competitors and notice price disparities between similar services, there may be a chance to raise some of your fees and increase your revenue, without losing business.
Similarly, if you notice guests are flocking to a particular amenity or menu item, you can safely increase prices without harming popularity – again increasing your TRevPAR figure.
How do you calculate TRevPAR?
TRevPAR is calculated by dividing total revenue by the total number of rooms. The TRevPAR calculation can be summarised as:
TRevPAR = Total Revenue / Total Available Rooms
Where:
- Total Revenue is the sum of all revenue streams for a given period (e.g., daily, monthly). This includes room revenue, food and beverage revenue, and any other sources of income; and,
- Total Available Rooms is the total number of rooms available for sale during the same period.
So if your hotel revenue for a day was $15,000, for example, and your hotel has 110 rooms, TRevPAR would equal $136. This means that, on average, each available room (whether occupied or not) contributed $136 to your hotel’s total revenue for that day.
Naturally you’ll want to try to increase TRevPAR as this will indicate an increase in average revenue, occupancy, or both.
TRevPAR vs RevPAR
At first glance TRevPAR appears very similar to RevPAR (Revenue per available room) but it’s quite a different measurement. While RevPAR relates only to room revenue, TRevPAR accounts for the total revenue of your property and measures it against your guest rooms.
Both are useful and perfectly viable metrics to track, with RevPAR providing the quickest and easiest way to keep an eye on your hotel’s performance.
However, neither takes into account any costs incurred or the actual occupancy rate of your hotel.
Top strategies to increase TRevPAR for your hotel
To elevate your TRevPAR, it’s essential to adopt a multifaceted approach that not only attracts guests but also maximises their spending. Here are some top strategies to consider:
Segmented marketing
Understanding your target audience is the first step to effective marketing. Segment your audience based on demographics, travel purpose, or booking behaviour. Tailor your marketing campaigns to resonate with each segment, ensuring that your promotions and offers align with their preferences and needs. For instance, business travellers might value fast Wi-Fi and conference facilities, while families could be drawn to package deals that include meals or local attractions.
Apply dynamic pricing on room upgrades
Dynamic pricing isn’t just for standard room rates. Apply this principle to room upgrades as well. Monitor demand and adjust the price for suite or room upgrades based on occupancy rates, seasonality, or special events. This can entice guests to opt for a more luxurious stay, boosting your revenue per booking.
Personalise guest experience
A personalised guest experience can lead to higher guest satisfaction and, consequently, increased spending. Use data from previous stays to tailor services to repeat guests. Whether it’s their preferred room type, a bottle of their favourite wine waiting in their room, or recommendations based on their past activities, these personal touches can enhance guest loyalty and encourage additional spending.
Enhance direct bookings
While OTAs can increase visibility, direct bookings often offer higher profit margins. Invest in a user-friendly website, offer exclusive deals or perks for direct bookings, and employ retargeting strategies to bring potential guests back to your site. By driving more direct bookings, you reduce commission costs and have better control over the guest experience from the start.
Offer add-ons
Maximise revenue by offering guests add-ons during the booking process or their stay. This could range from breakfast packages, spa treatments, guided tours, or even themed dinner nights. By bundling services or offering exclusive experiences, you can increase the average spend of each guest, contributing positively to your TRevPAR.
Increase TRevPAR and overall hotel revenue with SiteMinder
Improving TRevPAR isn’t just about filling rooms; it’s about maximising the revenue potential of every guest interaction, every service, and every room. SiteMinder is a game changer for medium to large sized hotels, offering a suite of tools and features designed to elevate your hotel’s revenue strategy, enhance existing revenue streams, and build new, valuable audiences.
- Dynamic Pricing Integration. SiteMinder’s platform seamlessly integrates dynamic pricing, allowing hoteliers to adjust room rates in real-time based on demand, seasonality, and other market variables. This ensures that your hotel always offers competitive rates, maximising bookings during peak times and maintaining healthy occupancy during off-peak periods.
- Comprehensive Distribution Channel Management. Expand your hotel’s visibility with SiteMinder’s integrated distribution channel management. Connect to a vast network of distribution channels, from OTAs to direct bookings, ensuring that your rooms reach a broader audience. With real-time updates and centralised control, you can manage bookings efficiently, reducing overbookings and discrepancies.
- Advanced Analytics and Insights. Knowledge drives strategy. SiteMinder’s platform provides in-depth analytics and insights, giving hoteliers a clear view of their performance metrics. From understanding guest booking patterns to monitoring revenue streams, these insights empower hoteliers to make informed decisions, refine strategies, and identify growth opportunities.
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