Revenue Management Metrics Study

The performance of revenue management has been traditionally measured with metrics, such as occupancy (OCC), average daily rate (ADR) and revenue per available room (RevPAR). These revenue management metrics utilized by the hospitality industry have been in existence since almost 30 years ago. Nevertheless, some hospitality businesses today have progressed to extended measures, such as gross profit per available room (GopPAR) and total revenue per available room (TRevPAR). As the world shrinks with globalization and revenue management has evolved, there is an urgent need to revise the metric that the industry employs. In fact, practitioners have urged for new metrics to reflect more accurately the new development in revenue management. One example of such new metrics is the application of Total Revenue Management which includes other departments on top of rooms. Another example resulting from the shift towards Customer-centric Revenue Management is Revenue per available customer (RevPAC). Both metrics are under discussion but yet to conceptualize.

The Hospitality Sales & Marketing Association International (HSMAI) APAC has commissioned Singapore Institute of Technology (SIT), represented by Assoc. Professor Dr. Detlev Remy, and a joint researcher team (Asst. Prof. Tan, SIT, Asst. Prof. Boo, SIT, Ms Shirley Tee, NYP, Mr. Stan Josephi, NHTV) to undertake a research on revenue management. The study aims to identify the different Revenue Management metrics in use, their limitations, and the possible new Revenue Management metrics.