Hotel performance is associated with the property’s ability to increase average room rate and occupancy. These two metrics, known as ADR (Average Daily Rate) and occupancy rate, are crucial to profitability. However, striking a balance between attractive pricing and high occupancy is a constant challenge. And it is in this context that IHCS comes into the picture.
The IHCS consulting firm is presented as an effective solution to address challenges in hotel management. With these professionals, hotels can optimize their rates and manage their rooms intelligently. This translates into an increase in the average price and higher occupancy.
IHCS MANAGES THE AVERAGE DAILY RATE (ADR)
ADR reflects the average revenue generated by each available room in a property during a specific day. This indicator is calculated by dividing the sum of revenue per rooms sold by the number of rooms available for marketing. Therefore, ADR provides an accurate view of how much guests are willing to pay per night.
The importance of ADR lies in its ability to measure the effectiveness of pricing strategies. Thus, a higher ADR indicates that the establishment is selling its rooms at higher rates. In turn, this can translate into significantly increased revenue and improved hotel performance.
Furthermore, ADR can be an indicator of the value perception that users have of the hotel. This means that higher rates may suggest a higher quality experience.
To understand the practical importance of ADR for hotel performance, let’s consider a concrete example. Let’s say a luxury hotel with 100 rooms has an ADR of $200. This means that, on average, each room sells for $200 per night. If the hotel manages to increase its ADR to $250, while keeping its occupancy rate constant, daily revenue will increase by $5,000. Over the course of a month or a year, these increases can make a substantial difference in profitability.
Our consulting firm IHCS knows how important ADR is to guarantee hotel performance. And that is precisely why our professionals focus on providing excellent management of this metric.
WITH IHCS HOTELS CAN IMPROVE THEIR REVPAR
RevPAR, or Revenue Per Available Room, is a metric that evaluates hotel efficiency and performance. To calculate it, the total amount of income generated by all available rooms during a given period is taken into account and divided by the number of rooms available for that same period. Essentially, RevPAR represents how much money a hotel makes per available room. Therefore, it is a key indicator of financial performance.
The influence of RevPAR on hotel profitability is significant. This indicator reflects the hotel’s ability to optimize both occupancy and rates. A high RevPAR indicates that the hotel is managing to fill its rooms at favorable rates. On the other hand, a low RevPAR may be an indication that the hotel has low occupancy or is selling its rooms at lower rates.
One of the objectives of the IHCS consulting firm is to help raise RevPAR. And achieving better RevPAR also increases hotel performance. Thus, in order to achieve this objective, IHCS implements Revenue Management strategies. This involves adjusting rates based on demand and other factors. But it also implies improving the quality of services to attract a clientele willing to pay higher rates.
THE IHCS CONSULTANT HELPS IMPROVE THE OCCUPANCY PERCENTAGE
The occupancy percentage reflects the number of rooms occupied in relation to the total number of rooms available. This metric plays a critical role in hotel performance as it is related to the rates and revenue generated.
When the occupancy rate is high, it means that a higher proportion of the hotel rooms are occupied. Without a doubt, this fact tends to increase the total income of the establishment. This is because customers pay a set rate per night. Therefore, as more rooms fill, revenue per available room (RevPAR) increases.
IHCS consulting plays an essential role in managing occupancy rates without sacrificing rates. This is because our professionals allow hotels to manage their room inventory across multiple distribution channels. In this way, the hotel can have greater visibility. Not to mention, rates and availability can also be adjusted, depending on demand and other factors.
IHCS ALLOWS YOU TO REDUCE THE PAYMENT OF COMMISSIONS TO OTAS
Commissions paid to Online Travel Agencies (OTAs) have a significant impact on hotel performance. These commissions, which sometimes reach substantial percentages, decrease the revenue from each reservation made through an OTA. As a result, hotels may face reduced profit margins and greater reliance on OTAs to fill their rooms.
However, IHCS offers a strategic solution to reduce dependence on OTAs and increase direct bookings. Through efficient management of distribution channels and website, IHCS can help increase the number of direct bookings. This increases profit margins, but not only that. It also strengthens the relationship between the hotel and its guests, which can lead to greater loyalty.
COMPREHENSIVE REVENUE MANAGEMENT STRATEGY WITH IHCS
IHCS is at the heart of a complete revenue management strategy for hotel performance. Our professionals play a critical role in enabling hotels to intelligently optimize their revenue management.
At this point, the ability to adjust rates dynamically is one of the key features of an efficient Revenue Management strategy with IHCS. For example, during times of high demand, a hotel may increase rates. Likewise, in low seasons the hotel can reduce rates and offer promotions to attract more guests.
The consulting firm IHCS emerges as an essential ally to boost both the average price and occupancy in hotels. Throughout this article, we have highlighted the key benefits of having IHCS support in the hospitality industry. With our professionals, hotels will be able to improve their performance and move towards the success they long expect.