Simply knowing the net profit of your hotel, café or restaurant does not provide you with enough information to successfully run your business. There are other numbers and indicators that can help you identify the strengths and weaknesses of your business. These KPIs for Hospitality are a great starting point for your monthly management reports.

Key Performance Indicators or KPIs (or, as we like to call them Tools for Success), are the perfect performance measures to ensure your business maximises efficiency. So here are our recommended equations to track performance and increase your output. We are really zooming in on these hospitality metrics to help your business.

Metrics and KPIs for Hospitality

Accommodation

These KPIs are simply looking at maximising the use of the real estate of a Hotel or Lodge. It’s all about getting a return on investment.

Occupancy Rate =  Rooms sold ÷ Rooms available

Average Daily Rate = Total Room Revenue ÷ Rooms sold

RevPAR (Revenue per Available Room) = Total Room Revenue ÷ Rooms available

Food Service

Here the metrics and KPIs are mostly focused on maximising raw materials and human resources. It other words, it is about effective purchase strategies and managing a productive labour force.

Food Cost = Food Cost ÷ Food Sales

Food Cost per head = Food Cost ÷ Number of Customers (covers)

Average Sale = Food Revenue ÷ Number of Customers

Labour Cost = Kitchen Wages ÷ Food Revenue

Bar Service

Bar service can sometimes be an add on to an existing food business. These metrics will allow you to make informed decisions on the effectiveness of this adjunct service. Above all, it will also help you control stock.

Average Sale = Beverage Revenue ÷ Number of Customers

Beverage Cost = Beverage Cost ÷ Beverage Sales

Final Thoughts on Metrics and KPIs

These KPIs for Hospitality, are equations that provide you information for successful management in this very competitive industry. Therefore, some of these hospitality metrics help you whether you are seeking to improve productivity or set departmental objectives. In Calxa you can create and customise KPIs using non-financial metrics to ensure your business is set for smooth sailing.

Lloyd Priddle

Lloyd has had a very successful career as an accountant, director and author for almost 40 years. Holding post-graduate qualifications in Business, Lloyd has specialised in Business Development, and worked with the Queensland Government and local councils on numerous occasions through association with AusIndustry and the SBAS Natural Disaster Assistance Program. He is also board member of a number of commercial and not-for-profit entities.