Evaluating your Hotel's performance through Direct Channel Indicators

24 January, 2022

Rapidly evolving businesses, arrival of new players, stiff market competition, introduction of the latest technology and systems, besides several other factors, have created an incredibly challenging environment for hotel management. Today, every hotel enterprise is trying to discover a well-defined revenue enhancement strategy that not only supports profit generation but also gives them a sharp edge over competitors in the hospitality industry. It therefore becomes imperative for hoteliers to have constant vigilance over their performance through a robust analysis of their Business performance.

The success of a hotel's business depends on informed decisions and data-driven pricing strategies. These can be influenced positively through the use of key performance indicators (KPI's) or metrics that help hoteliers assess their business better. To deepen your understanding, here is an outline of a few key metrics that can be tracked to improve your business performance substantially.

Total Website Conversion
Total Website Conversion is a method used to evaluate your hotel's performance that is achieved directly through your hotel's brand website. It basically suggests the overall percentage of unique visitors to your website who made a direct reservation. A Research suggests that 2 to 3% of the total visitors coming to a website make direct bookings while others leave without making any reservations. Subsequently this metric serves as a base for calculating the number of unique website visitors who made direct bookings.

Visitor to Booking Engine Conversion
Visitor to Booking Engine conversion is the percentage of unique visitors who did an online search on hotel's website booking engine.

Booking Engine to Booking Conversion
Similarly, a booking engine to booking conversion is the percentage of visitors who made a search on the booking engine and made a booking.

Average Daily Revenue
Average Daily Revenue is a parameter used in the hospitality sector to measure performance in terms of revenue generation during a specific time period. It is obtained by dividing the total revenue earned during a specific time period by the total number of calendar days of that duration. The Average Daily Revenue of each hotel will be determined on the basis of the current market conditions and the revenue efficiency of a business. This key performance indicator is utilized by hotels to do comparison analysis and identify key trends together with emerging challenges in order to make a strategy modification if required.

Direct Occupancy Rate
Occupancy rate is the percentage of occupied rooms at a given time period. To be precise Direct Occupancy Rate is the direct space physically occupied divided by the total rentable or available inventory. An occupancy rate is one of the most significant indicators of a hotel's success. A regular tracking of the occupancy rate helps you scrutinize your business performance in terms of occupancy and accordingly strategize your marketing and promotional efforts to improve your hotel's occupancy levels.

Disparities Frequency / Amount
Very often there are price disparities across OTAs or distribution channels. A clear analysis of disparities with reference to frequency (number of times the disparities have occurred) and amount (rate of price reduction) assists the hotel business to check their pricing strategy and have uniform rates across channels.

Hotel businesses can evaluate their performance by applying some or all of the above mentioned techniques. ResAvenue's Channel Manager solution, Channel Connect enables you to stay in absolute control of your business through its effective reports and analytics system. Through our smart business analytics, hoteliers can easily view their bestselling channels and low-performers period-wise. You can now get real-time insights on your business performance and find the appropriate measures to improve the same.