Educational

Key to understanding your hotel’s profitability, your P&L statement outlines your profits or losses over a given time period—as the name suggests.

Hotel owners and operators are best positioned for success when they measure their business from every angle. That is why no benchmarking experience can be considered comprehensive without frequent insight into the bottom line.  

Tracking hotel operating expenses is vital in understanding your property's financial performance and better managing costs, which is part of the equation for increasing your profit margins. Given that gross operating profit is calculated by subtracting total operating expenses from total operating revenues, minimizing expenses and maximizing revenue is the obvious approach to boosting profits.

• How to calculate RevPAR (Formula and Examples)
• What is the relationship between ADR and RevPAR?
• How to use RevPAR
• The Role of RevPAR in Profitability

How P&L statements help you understand your hotel profitability

Understanding your hotel’s financial performance involves thorough analysis of your balance sheet and what is often called your income statement – more commonly referred to as your

In a previous post, we discussed the vital role of RevPAR when measuring hotel performance.

If you’re familiar with the hotel revenue management discipline, you probably know that its strategic cycle comprises four main stages—analyze, identify, develop and monitor. You’re probably also familiar with the STAR Report and the dSTAR platform, which empower you with the data intelligence needed to navigate each of those stages and measure your property’s performance on an ongoing basis.

Hotel benchmarking is the process of comparing your property's or portfolio’s performance against the competition, adding a layer of context to what success and failure looks like in your circumstances and environment.

Hotel benchmarking can help you answer questions such as: