5 Strategies to Increase TrevPAR at Your Hotel

From ADR to RevPAR and GOPPAR, lodging operators must track many metrics to assess business performance and make strategic decisions. One of the most powerful but overlooked measures of success for hotels today is TRevPAR, or total revenue per available room. Here we discuss what TRevPAR is and how to increase it at your property.

The Rising Importance of Measuring Total Revenue Performance

Unlike RevPAR, TRevPAR measures total hotel revenue, not just room revenue. It looks at the total income generated by a property, including rooms, food and beverage, meeting spaces, parking, wifi, and more.

Its rising importance can be attributed to travelers changing values and behaviors. Today’s traveler looks at more than just the room when booking accommodations; they want unique experiences, tailored amenities, and personalized add-ons to enhance their stay. Depending on the type of property you run and the services you offer, non-room revenue can make up a significant portion of your income. Measuring this metric can help you identify key areas of growth.

TRevPAR Formula

To calculate TRevPAR, pull revenue information from your P&L statement or balance sheet and determine what period you’d like to measure (ie. month or year).

Formula:

TRevPAR = Total revenue / total available room nights

5 Ways to Increase TRevPAR

TRevPAR is affected by many factors, from the number of rooms available to how much guests spend on onsite services. Here we look at how to increase TRevPAR whether you’re starting a new hotel business or a seasoned pro.

1. Offer Unique Activities and Experiences

No matter where your property is located, there are bound to be local experiences and activities you can offer guests. You can support your community and increase TRevPAR by partnering with local operators. You can keep activities and experiences on a property (like a private cooking class with your chef) or go off-site (like walking tours or mountain biking). Whatever you choose, ensure it speaks to your target audience and makes sense for your bottom line.

2. Develop a Catalog of Upsells

Travelers vary significantly in the small things important, from daily housekeeping to late checkout. To boost TRevPAR, consider what upsells you can offer that guests will pay for (but won’t be upset aren’t included). Some of the most common upsells include parking, late check-out, pet fees, and breakfast. By giving guests the option to add on services that are important to them, you can improve the guest experience and overall revenue.

3. Review Your Distribution Mix

Do you know which distribution channels drive the most TRevPAR for your property? Look at what types of guests book across different channels and how much they spend on rooms and additional services. For example, you may find that GDS’ attract business travelers with bigger budgets for suites and services. Once you pinpoint your key distribution channels, you can build a strategy targeting these channels, properly allocating your marketing and distribution budget. Remember, don’t solely focus on one channel – ensure you have a mix of direct and indirect distribution sources.

4. Get Creative with Your Underutilized Spaces

Do you have a ton of space in your lobby that’s just kind of sitting there? Or meeting rooms that haven’t been used in years? Wasted space results in lost revenue. Think of creative ways to use spaces that no longer serve a critical purpose. Consider adding coworking spaces and charging an additional fee for guests or locals to use them. Host weekly events like open mic nights or yoga classes that unite guests and the community. With well-thought-out spaces and activities, you can drive more revenue, improve the guest experience, and encourage community engagement.

5. Equip Your Team with Technology

Equipping your team with the right technology to upsell activities, services, and rooms is key to increasing TRevPAR. With a guest messaging platform, you can incorporate add-ons and upsells more seamlessly throughout the guest experience. Starting with your booking engine, make it easy to add on things like parking and early check-in. Before arrival, send guests experiences and activities to schedule for their upcoming trip. When communicated via the right channels (at the right time), you will see a significant increase in revenue.

Revenue management software is another pivotal tool to help price rooms effectively, increasing TRevPAR. Compare rates and availability and maintain a dynamic pricing strategy based on changes in market demand. Ensure you always benchmark key metrics against your competitive set for optimal performance.

Delivering Value while Increasing TRevPAR

Persistent inflation and rising travel costs have led to higher price sensitivity in travelers. Lodging operators must find ways to deliver value to guests while driving revenue. Considering everything throughout your property requires a big picture, less room-centric approach.

Ensure you’re using TRevPAR with other key metrics, such as GOPPAR, to get a full picture of performance. Measure these data points regularly to identify trends and help guide your decision-making process.

Free Report: The State of Independent Lodging Report 2023