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Analytical Potential of the Major Indicators in Hospitality Industry

Author

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  • Ivanka Nikolova

    (University of National and World Economy, Sofia, Bulgaria)

Abstract

The article consists of two parts. The first one is theoretical and considers the cognitive nature, the advantages and disadvantages, the methods of measuring and the analytical potential of the major indicators in hospitality industry: revenue per available room (RevPAR), net revenue per available room (NRevPAR), adjusted revenue per available room (ARPAR), gross operating profit per vailable room (GOPAR). Special emphasis is put on the revenue per available room indicator (RevPAR) which has been recognised as the optimal tool for comparisons in hospitality industry owing to its sustainability. The nature of the second part of the article is of practical application. The changes in the revenue per available room (RevPar) indicator for high category business hotels in ten leading European tourist cities have been analysed based on data for the period 2008-2014 as well as on forecasts for the years 2015 and 2016. The comparative analysis revealed changes in the leadership in the sector of business hotels based on the revenue per available room (RevPAR) indicator. The way the changes in the rate of the revenue per available room (RevPAR) indicator have taken place has also been analysed through the use of two types of growth rate – growth rate on a chain-weighted basis and on a fixed basis. Applying the principle of scientific abstraction through the use of the chain substitution method the author has demonstrated the importance of the indicators of average daily rate and occupancy for the positive growth in the revenue per available room for the survey period. The necessity for careful management of the average daily rate - occupancy has been confirmed and it is this ratio that is of crucial importance for a hotel’s success.

Suggested Citation

  • Ivanka Nikolova, 2016. "Analytical Potential of the Major Indicators in Hospitality Industry," Ikonomiceski i Sotsialni Alternativi, University of National and World Economy, Sofia, Bulgaria, issue 3, pages 71-82, June.
    • Handle: RePEc:nwe:iisabg:y:2016:i:3:p:71-82
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    More about this item

    Keywords

    hospitality; indicators; revenue per availableroom (RevPar); average daily rate; occupancy;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • Z31 - Other Special Topics - - Tourism Economics - - - Industry Studies

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