Understanding the top seven KPIs in the vacation rental industry is the key to maximizing your company’s performance. Paying attention to their trends and the relationship between them will help you create an effective revenue management strategy. View what each KPI means and an example of applying them below!
Paid Occupancy Rate
Tells you the percentage of occupied rooms.
Calculation: Paid Occupancy Rate = Guest Nights /Total Nights
Example: Paid Occupancy Rate 60% = 60 / 100
Vacancy Rate 40% = 40 / 100
Adjusted Occupancy Rate
Adjusts the occupancy rate to account for owner reservations and other hold nights.
Calculation: Guest Nights / Total Nights Available to Book
Example: 75% = 60 / 80
Average Daily Rate (ADR)
ADR measures the average Unit Revenue paid by guests for guest nights in a given time.
Calculation: Total Unit Revenue (Nightly)/ Total Number of Guest Nights
Example: Average Daily Rate $112 = $6,720 / 60 Guest Nights
Why Does ADR matter?
Revenue Per Available Rental (RevPAR)
Referred to as Revenue Per Available “Room” with hotels, RevPAR is a critical KPI for measuring revenue performance. RevPAR considers both the average rate at which you booked the property (ADR) and the number of nights it was booked (Occupancy). This provides a better indicator of overall performance when compared to looking at the ADR or the Occupancy alone.
Calculation: = Occupancy x ADR
(or) = Total Unit Revenue / Total Nights in a Given Period
Example: RevPAR $67.20 = 60% x $112
The total amount of revenue that all rental units are bringing in.
Unit Revenue Chart Insights:
The number of active rental properties in your market at a given time.
Why does supply matter?
Supply Chart Insights:
The number of days between guests making reservations and checking in.
Why does the booking window matter?
Average Booking Chart Insights:
The average number of days guests spend in a rental.
Why does the stay length matter?
Nightly rates, occupancy, revenue, booking windows, stay lengths, and more vary from season to season.
Example: 2021 average booking window by week. Summer trips are booked much further in advance than spring and fall stays. Booking windows are longer for holiday stays.
Nightly rates, occupancy, revenue, booking windows, stay lengths, and more vary from destination to destination.
Example: 2021 Occupancy by month. Austin and Dallas are less seasonal and don’t have large drops during the off-season. South Padre Island is popular during the winter. Galveston has a strong spring and summer but very low fall and winter.
Interested in learning more about vacation rental KPIs? Schedule a personalized demo here!