KPI's for Hospitality Businesses

Hospitality KPI's: Key Metrics for Success

Key Performance Indicators (KPIs) are essential metrics that help hospitality businesses track their performance, identify areas for improvement, and make data-driven decisions. The specific KPIs used can vary depending on the type of hospitality business (e.g., hotel, restaurant, cafe, resort) and its goals.

Here are some common KPIs that can be used in a hospitality business:

Table Turnover Rate

Table Turnover Rate:

For restaurants and cafes, this KPI measures the number of times a table is occupied by different guests over a specific period. A higher table turnover rate indicates efficient use of seating capacity and increased revenue.

Food and Beverage Cost Percentage

Gross Margin % or Food and Beverage Cost %:

This KPI assesses the cost of goods sold (COGS) for the food and beverages served compared to the revenue generated. It helps track the efficiency of inventory management and cost control in a restaurant or cafe.

Employee Satisfaction and Turnover Rate:

Employee satisfaction surveys and turnover rates are crucial KPIs to measure how well the hospitality business is managing its workforce. High employee turnover can indicate underlying issues that need to be addressed.

Labor Cost Percentage

Labor Cost Percentage:

This KPI tracks labor costs as a percentage of total revenue. It helps businesses manage labor expenses efficiently.

Customer Satisfaction (CSAT) and Net Promoter Score (NPS)

Customer Satisfaction (CSAT) and Net Promoter Score (NPS):

These KPIs measure customer satisfaction and loyalty. CSAT surveys provide immediate feedback on guest experiences, while NPS gauges the likelihood of customers recommending the business to others.

Occupancy Rate

Occupancy Rate:

This KPI is commonly used in hotels and resorts. It measures the percentage of available rooms or accommodation units that are occupied over a specific period. A higher occupancy rate indicates better utilization of the property and higher revenue.

Average Daily Rate (ADR)

Average Daily Rate (ADR):

ADR is the average revenue earned from each occupied room or accommodation unit in a hotel or resort. It's calculated by dividing the total room revenue by the number of occupied rooms. ADR helps assess pricing strategies and revenue generation.

Revenue per Available Room (RevPAR)

Revenue per Available Room (RevPAR):

RevPAR combines both occupancy rate and ADR to give a comprehensive view of a hotel's performance. It is calculated by multiplying the occupancy rate by the ADR. RevPAR helps evaluate a property's overall financial performance.

Online Reviews and Ratings

Online Reviews and Ratings:

Monitoring online reviews and ratings on platforms like TripAdvisor, Yelp, or Google can provide insights into customer perceptions and help identify areas for improvement.

Repeat Customer Rate

Repeat Customer Rate:

This KPI measures the percentage of customers who return to the business for additional visits. A high repeat customer rate indicates customer loyalty and satisfaction.

To Summarise

These are just a few examples of the many KPIs that can be relevant to a hospitality business. The key is to select KPIs that align with the business’s objectives and provide valuable insights into its performance. Regularly tracking and analyzing these metrics can help identify trends, spot opportunities, and address challenges to drive success in the competitive hospitality industry.


John Carolan ACMA, CEO of Solve Outsource

Contact Email: john@solve.ie