Are You Using TrevPOR To Focus On Profitability?

August 17, 2021 | Daniel Lofton, Director of Hospitality Solutions, Americas, Duetto

As hotel markets reopen and demand returns somewhat sporadically, revenue teams need access to the right metrics to ensure that their attention is focused on profitability. After 18 months of uncertainty, the bottom line has never been more important. Lined up against traditional KPIs, Total Revenue per Occupied Room (TrevPOR) is the performance metric most focused on profitability.

According to Hotel Revenue Insights, ‘Profit is not driven by occupancy. It is also not driven by ADR. It is driven by three factors: TrevPOR, TrevPAR, and Cost Base. These three factors are part of the total equation that results in the one metric most important to hotel owners: gross operating profit (GOP). In the hotel industry, it’s profit — not revenue — that pays the bills. Remember: RevPAR doesn’t cover debt service or payroll’.

Traveler habits have changed and hotels are being presented with a golden opportunity to capture more revenue per guest, as people find themselves more comfortable mixing within the hotel environment rather than stepping out. F&B and other incremental revenue streams all need to be accounted for and revenue teams need to factor these into their room rate strategy. An occupied room is worth so much more than just the room rate when these additional revenue streams are layered in.

4 Reasons To Use TrevPOR

Let’s consider why TrevPOR (TrevPOR = (Room + F & B + other income) / total occupied rooms) is a more effective RMS metric than others: 

  • By focusing on total folio versus “just” room revenue, TrevPOR helps teams drive more spend - and ultimately profit - from every occupancy - not just filling rooms.
  • TrevPOR can help you strike the right balance between the price of the guest room and the business, by capturing other touchpoints during the customer’s stay. 
  • When factoring in loyalty, comp, and other customer data, TrevPOR helps you fine-tune segmentation to better connect customer needs with desirable hotel services.
  • TrevPOR can also help you transform the physical space of your property from low-demand/low-use to higher value, more monetizable use cases.

Pushing Packages & Promotions

Duetto Open Pricing algorithms and advanced revenue strategies help you target and respond quickly to even “quick twitch” demand and market changes, helping you drive TrevPOR at every opportunity.

Using Open Pricing for packages and promotions can help you to optimize ancillary, non-room revenue streams such as parking, F&B, spa, or golf. Similarly, smart segmentation and room-type pricing can help you put the most profitable business in the right rooms while boosting upsells, which helps increase your room-type revenues. Together, these tactics enable you to pick up, and respond to, demand shifts, and deliver the right price for the right room - again, all key factors in boosting TrevPOR. 

Being able to account for non-room revenue has proved vital to our customers over the past 18 months, as Ben Berry, Director of Sales and Purchasing at English Lakes said: “After seeing 40% or more room rate increases in Summer 2020 powered by Duetto, English Lakes looked at optimizing other revenue streams. Due to the surge in leisure and because people are less willing to go out for dinner, we’ve been able to do well with onsite F&B.”

Let TrevPOR help you impact that bottom line profit, and this is vital right now. Get creative with your packages, and operationalize revenue - incentivize front desk to push upsells and restaurant reservations. Focus on the bigger picture and not just room revenue, and make sure you are attributing all revenue streams through TrevPOR reporting. 

 

Want to find out how our solutions and Open Pricing methodology can help boost profit at your hotel? Get in touch to find out more.

 

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