Ratios
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Ratios helping you
Financial and marketing ratios are created with the use of numerical values taken from financial statements (operating reviews) as well as from marketing data, to gain meaningful information about a company. he most important one is the occupancy rate of your hotel.
- The occupancy rate.
This is a very important ratio, which gives you management information on the relationship between the number of occupied rooms and the total number of rooms. Benchmarks will put results into perspective. The occupancy rate is the % of the available rooms booked (occupied) during a certain period between 12.00 and 12.00 the next day. The hotel market has a structural overcapacity: the supply of hotel rooms exceeds the demand for the hotel(nights). So whatever you do, it is, (as in reality), very difficult to achieve an occupancy rate exceeding 80%. This means that in a year, from your 100 hotel rooms you had 80 rooms occupied. On taking over your occupancy rate is 50% (check key metrics on operating review). - Average room prices
Also the average room prices, especially if you compare it to the market averages and to your competitors choices, is interesting. You all start of, in year 0, with 90 | 120, which means average weekend price (lastminute price € 80 and rack rate € 100) is € 90. The average weekday prices (lastminute price € 100 and rack rate € 140) is € 120. - Average net profit of all hotels in city
This as well, provides you with a benchmark that can help you in settings gaols and defining success.
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