What Is TRevPAR and Why Is It Important for Your Hotel?

TRevPAR is a crucial performance metric that stands for Total Revenue per Available Room. As someone who works in the hotel industry, you’ve probably heard of this as its measurement helps determine the total revenue a hotel generates per available room, considering the number of rooms sold, the average daily rate, and other services the establishment offers. By calculating TRevPAR, you can determine your hotel’s overall financial health.

It’s important to understand that TRevPAR varies depending on factors such as demand, cost structures, and product offerings. For example, luxury properties typically have a higher TRevPAR than budget hotels in the same area because they offer more amenities and better rooms at a higher price point.

Understanding TRevPAR is essential in optimising hotel performance and making informed business decisions. Ensuring you stay informed on this metric will optimize your hotel’s performance; our TRevPAR calculator page displays the formula for calculating this metric.

What’s the Difference Between TRevPAR and RevPAR?

TRevPAR is an extension of the Revenue Per Available Room (RevPAR) metric which represents the revenue generated per available room, whether or not they are occupied, while TRevPAR includes all other forms of revenue that a hotel may generate, such as room service, the bar, the restaurant, airport pickups, day spas, and more. By taking into account all other sources of revenue, TRevPAR provides a more accurate picture of how much money a hotel makes per room.

TRevPAR is particularly beneficial for accommodation providers offering various add-on services and upsells through their guest service menu, and this is because room rates alone do not provide a comprehensive financial picture.

Beyond Rooms: How Can You Increase Your TrevPAR?

How can you provide ancillary services to your guests? Learn about six effective strategies that can help you increase your revenue and TRevPAR.

1. Offer ancillary services

RaccoonUpsell is a digital guest service menu and a powerful tool designed to help hotels increase their revenue by presenting personalized upselling opportunities to guests during their booking process or stay. This feature uses guest preferences, booking patterns, and historical data to offer specific upsell opportunities to individual guests, enhancing their experience and boosting the hotel’s overall revenue and TRevPAR.

The RaccoonUpsell upgrade feature enables hotels to capitalize on ancillary revenue streams by offering guests additional services, amenities, or room upgrades. These upsell opportunities may include room upgrades to higher categories, add-on services like breakfast, spa treatments, late check-out, or special packages customized to guest preferences.

Additionally, hotels can increase their conversion rates by personalizing upsell offers based on guest data and preferences. This personalized approach ensures that the upsell offers are relevant and appealing to each guest, enhancing and optimizing their overall experience across all stages of the customer journey. The incremental revenue generated from upsell offers contributes directly to the hotel’s overall revenue and profitability. 

2. Utilizing your property spaces

Grey Rooms is an exclusive feature within RoomRaccoon that helps hotels boost their revenue and TRevPAR. These rooms allow hotels to capitalize on special events such as conferences or weddings by allowing guests to reserve them for their specific needs. Unlike standard booking engine options, Grey Rooms cannot be booked directly by guests. But, with the Documents Module, hotels can still communicate with guests and process payments for Grey Rooms, unlocking new revenue streams and providing greater booking flexibility. 

3. Analyze TRevPAR reports

Hotels can use the Reports feature, RaccoonReporting, to gather comprehensive data and analyze it to make informed decisions that can help them improve TRevPAR. This tool generates detailed reports on various aspects of hotel operations, including room revenue, ancillary revenue, occupancy rates, and average daily rates (ADR). By analyzing these reports, you can identify trends, patterns, and areas for improvement in their revenue management strategies. You can also segment your revenue data into different groups based on room type, booking source, customer type, or period of stay. With this segmentation, you’ll understand which revenue streams are performing well and which may require attention or optimization.

4. Booking Engine Add-ons

Booking engine add-ons provide guests with additional services, amenities, and customization options during the booking process, which enable hotels to upsell and cross-sell effectively. These add-ons complement guests’ stays and may include breakfast packages, room upgrades, early check-in and late check-out options, and parking fees for occasions such as honeymoon or anniversary celebrations. Presenting these add-ons during the booking process encourages guests to increase their spending and boost your revenue.

Booking engine add-ons also provide hotels with a flexible and dynamic platform to experiment with pricing strategies, promotions, and packages. Hotels can strategically adjust pricing for add-ons based on demand, seasonality, or booking patterns, optimizing revenue generation and maximizing profitability. 

5. Vouchers

The Vouchers Management feature caters specifically to hoteliers in the UK and Ireland. It works in collaboration with our voucher partner, SimplyManageVouchers.com. This integration enables hoteliers and guests to use vouchers from them as a payment method for reservations. The feature aligns well with the growing trend of hotel gift voucher systems, providing a convenient and flexible payment experience that contributes to the expansion of TRevPAR.

6. Packages

Hotel packages are an excellent way to increase revenue by combining accommodations and services into attractive guest deals. These packages offer guests convenience, value, and a hassle-free booking experience as they can easily select and purchase a comprehensive package that includes everything they need for their stay.

By bundling multiple components into a single package, hotels can offer these packages at a discounted rate compared to purchasing each separately, providing guests with added value and an incentive to book. Furthermore, hotel packages allow you to target specific market groups and capitalize on seasonal trends and events. For example, your hotel can create packages tailored to holidays, festivals, weddings, or other special occasions, offering unique experiences and amenities that appeal to guests celebrating or participating in these events.

What Are the Benefits of Diversifying Your Revenue Streams

By exploring new avenues of income for your property, you can pave the way towards long-term success and profitability. Another benefit is that you reduce dependence on a single product or service, increasing financial stability, cash flow, and building brand recognition and reputation.

• You benefit from the aggregated revenue across all departments: Including cross-department revenue, such as renting out your space for conferences or events, can be very helpful in calculating a hotel’s overall performance, and that is what makes Grey Rooms so beneficial.

• Shows the bigger picture: To improve your hotel’s profitability, use the TRevPAR equation to understand your revenue sources comprehensively. Compare revenue sources between departments and use operational metrics to determine where to invest your resources.

• Stay ahead of the competition: Compare your hotel’s fees with competitors, identify gaps, and adjust your fees to outperform the competition and increase TRevPAR. For instance, if your competition charges more for parking, adjust your fees to generate more revenue from that department.

• Identify changes in value over specific time periods: Your hotel reporting and data analytics will help you to identify revenue fluctuations and make informed decisions. You’ll know when to allocate more marketing resources to departments that positively impact your revenue, such as the warm bath spa services during winter months.

• Gain an understanding of consumer behaviour through valuable insights: You need to understand and anticipate guest behavior to provide tailored services. By monitoring data across revenue streams, you can tailor sales and marketing messages to specific audiences, for a more engaging guest experience.