Revenue per room
Revenues
The historical revenues total, as explained in the operating review, was € 2,866,902. In the same year, the occupancy rate was 50%. This means we can make the following ratio's. These ratios are based on assumptions and give an indication, but they are not entirely correct. In accounting, no distinction has so far been made between the revenues (and costs) of the three groups of income: rooms, food & beverage and banqueting and other revenues.
Relationship with net profit
Of course there is a strong relationship among Net profit, costs made in your Year 1-2-3-4 decisions, and the occupancy rate.
Upselling
An important part of sales and revenues is upselling. Check this page.
RevPAR
So we look at the (total) revenue Per Available Room, the so-called RevPAR. This is a metric used in the hospitality industry to measure hotel performance. It can be measured in many different ways; we will divide the hotel's total room revenue by the total number of available rooms in the period being measured.
We have 100 rooms times 365 (we calculate with 364) days, so a capacity of 36,400 per year.
The total revenue is as you take over, just on room rental is € 1,949,220
So per room night an average revenue of € 53.55 on all available rooms.
Let's look at the (total) profit Per Available Room.
We have 100 rooms times 365 days (we calculate with 364), so a capacity of 36,400 per year.
The total profit, as you take over is € 436,307 (on all operations).
So per room night an average profit of € 11.98 on all available rooms.
If you want to read more on this, check this page.
RevPOR
So we look at the (total) revenues Per Occupied Room, the so-called RevPOR. This is a metric used in the hospitality industry to measure hotel performance. It can be measured in many different ways; we will use dividing the total revenue by the number of rooms actually being sold to guests in the period being measured.
We have 100 rooms times 365 days (we calculate with 364), so a capacity of 36,400 per year and 50% occupied, so 18,200 occupied rooms
The total revenue, as you take over, on room rental only is € 1,949,220
So per occupied night an average revenue of € 107.10 per occupied room.
Let's look at the (total) profit Per Occupied Room.
We have 100 rooms times 365 days (we calculate with 364), so a capacity of 36,400 and 50% occupied rooms, so 18,200.
The total profit, as you take over, is € 436,307 (all operations).
So per room night an average profit of € 23.97 per occupied room.
Check the effect of this on the Cost price page.
If you want to read more on this, check this page.
Example
So as a conclusion of these calculations: If you occupy one additional room an indication of the additional revenues could be 364 x 1 additional room x € 107.10 so € 38,984.
And an indication of the additional profit: 364 x 1 additional room x € 23.97 so € 8,725.
To get more specific details, look at the occupancy rate page and examine the difference between fixed costs and variable costs.
Trying to analyse the revenues of the rooms as shown in the operating review, might be different from what you expect.
Keep in mind that calculations are never 'perfect'. There is always a difference between the outcome of this calculation and 'reality': caused by cancellations (yes or no refunds), double bookings, short stays, rounding-up, missing one day in a year etc. Combined, this might differ up to a f0iew percent in the expected revenues linked to the occupancy rate.
GOPPAR
Meaning Gross Operating Profit Per Available Room.
In the hotel industry, there are a large number of KPIs to monitor the hotel. GOPPAR is one of them. By default, Emerald Forest Hotel does not use these ratios. Using the information on the Net profit and capacity pages, you could use it. More info on Goppar explained.
