TRevPAR as Hotels Performance Evaluation Indicator and Influencing Factors in Portugal

Abstract

In a global competition current scenario, measuring the performance of hotels is increasingly important for managers who, to take decisions, need management indicators and tools. The most common operating indicators are occupancy rate and RevPAR (Revenue Per Available Room). The goal of any hotel is to be as profitable as possible, so they must work on increasing revenues and decreasing costs. To increase revenues the focus has been on revenue management practices, and there is already several software that help hoteliers to define the most appropriate price for each customer. Therefore, managers mostly seek to increase accommodation revenue, however from a total revenue management perspective revenue from other departments must also be considered. The TRevPAR (Total Revenue Per Available Room) appears as a more comprehensive indicator that takes into account all hotels revenue sources. The purpose of this research is to study and highlight TRevPAR influence factors, since this information have practical implications in the hotel managers’ decision. This methodology was carried out through the analysis of 948 hotels from 2010 to 2017. The sample was obtained by crossing two databases: SABI platform and Portuguese National Tourism Registry (RNET). The tested determining factors were the hotel's location, size, number of stars and services. An original and exhaustive study in terms of services meets the purpose, thus, the influence on TRevPAR was tested on outdoor and indoor pools, tennis, golf, spa, meeting rooms and restaurants.