Welcome to ‘My key KPI’, a new weekly content series where we ask CFOs and FDs what metrics and measures they use to drive their businesses forward.
The aim is to understand how different finance professionals, across a broad array of industries and sectors, use data to inform their decision making.
This week's edition hears from Manuel Fernández, the global financial director of the Room Mate Group, a portfolio that encompasses a hotel chain, property management and consultancy.
My key KPI: RevPAR and online reputation
The Room Mate Group is a Madrid-based brand with three seperate business units, including a chain of boutique hotels. The group now runs 22 hotels and has just signed a €100 million agreement with Q Capital to its rental apartment business Be mate.
For the group’s global financial director Manuel Fernández, there’s plenty to do. His focus is on two key drivers. The first is revenue per available room (RevPAR). The measure is calculated by multiplying a hotel's average daily room rate (ADR) by its occupancy rate.
“From a financial point of view, RevPAR is arguably the most important of all ratios used in the tourism industry. This measure gives us information about the combined effectiveness of rates and occupancy, putting all properties on a level playing field."
Apart from RevPAR, Room Mate’s other key KPI is online reputation, which is based on the client’s reviews. “It shows how happy our guests are, and our main objective as a group is making people happy. We are very proud to say we achieved 90.3% in 2017.”
Online reputation and RevPAR gives Fernández a full view of the operation’s results and profitability. “Our online reputation tool lets me know the experiences people are having in our hotels, listening to them and understanding their necessities is essential for us.
“On the other hand, RevPAR gives me information about the structure of my costs, my investment capacity and even, indirectly, the profitability of the company (RevPAR let us know which is our investment capacity and even the cost structure that we can bear)
“Thanks to RevPAR we can build up our company’s level of profitability: measure our costs, investment and profitability, which is the main challenge in the tourism industry from a financial point of view. Thanks to our online reputation tool we can measure how effective our investment, spend and performance is at making our guests happy, another great challenge in the tourist industry.”
About Francois Badenhorst
I'm AccountingWEB's business editor. Feel free to get in touch with comments, tips, scoops or irreverent banter.