FROM TRADITIONAL TO NEW HOTEL REVENUE MANAGEMENT METRICS: AN EXPLORATORY STUDY ON THE POTENTIAL OF NREVPAR AND REVPAC

Abstract

Purpose – This research aims to uncover the weaknesses of traditional hotel revenue management metrics (RM) and evaluate the potential application of two new metrics, specifically net revenue per available room and revenue per available customer. Design/Methodology/Approach – Initially, a focus group roundtable discussion was conducted with 15 participants who held managerial positions in various hotel chains. The objective was to identify critical hotel revenue metrics to be included in the subsequent online questionnaire. An online questionnaire was then distributed to HSMAI members in Asia, the Americas and Europe, as well as through personal contacts. In addition to quantitative analyzes, the data were also content analyzed to reveal the weaknesses of the existing RM performance assessment tools based on the technology-organization-environment framework. Findings – Considering the positive results, the application of the new metrics would be well accepted by RM. However, the weaknesses of the traditional RM metrics in terms of data quality and robustness, completeness of measurements, comparability with industry, and organizational support should be considered when designing the new RM metrics. Originality of the research – This study is the first to offer insights into the potential of designing new RM measures. It also provides guidance on what to consider when developing new RM metrics.