Occupancy and Average Room Rate in Front Office Performance Analysis

This report delves into the significance of occupancy rate and average room rate statistics in evaluating front office performance within the hospitality sector. Occupancy rate, defined as the proportion of occupied rooms to total available rooms, and average room rate, which reflects the average revenue generated per occupied room, are crucial metrics. The report highlights the importance of Revenue per Available Room (RevPAR) as a key performance indicator, emphasizing its time-based nature and its use in benchmarking against competitors. It also explains how these statistics are used in conjunction to assess a hotel's financial standing and market competitiveness. The report further explores strategies for improving occupancy rates through promotions and market targeting, concluding that a combined analysis of these parameters offers a comprehensive view of front office efficiency and overall hotel success.

Explain the use and purpose of occupancy and
average room rate statistics in monitoring front
office performance.

MAINBODY
Occupancy rate is define as the number of rooms occupied in the hotels among the total
number of rooms available whereas the average room rate determines the average income from rent
that comes from per paid occupied room(Ammachathram, 2018). These statistics are the standard
units which are very important in monitoring front office performance (Orfila-Sintes and Mattsson,
2009). Rev par or revenue per available room can be calculated by dividing revenue generated from
the sales of room from the total number of rooms in the hotel(Bauer, 2017). It can vary from market
to market. As Revenue per available is time based factor it is often counted time to time based on
some fixed amount of time taken by the hotel to measure the factor (Abdullah and Haan, 2012).
This is a parameter which is used to compare with the other competitors in the same market
using the revenue per available room index. One of the best way to measure the performance of the
hotel is checking the revenue per available room on a fixed time of interval like weekly. It can also
be efficaciously measured during seasonal time period by the front office(Deeptha, 2018). Other
measure is average rate statistics which is a financial indicator and can be used as an important
parameter for the comparison with the competitors and the performance of itself also (Pan, 2007).
Average room rate is calculated as dividing the revenue earned from the room sold by the
used house rooms excluding other complementary rooms. It not only determine the occupancy of
the property but also defines the financial position of the hotel to survive in the market or to earn
lots of profit and compete with the other competitors for the targeted customers. Also the occupancy
rate which is the basis of the other two parameters determines number of rooms which are filled.
The occupancy rate figure can be checked on the fixed time of interval (Viglia , Minazzi and
Buhalis, 2016). Its not at all realistic to have 100 percent occupancy rate neither it is possible to
maintain as there can be many factors which affects the occupancy rate of the hotels such as price ,
location ,cleanliness and the quality of the basic services provided by the hotels(Delp, 2015). It is
important to every hotel to keep up a competitive occupancy rate to be ahead in the market(Coenen,
2017). As the occupancy rate increases the revenue per available room increases thus the average
room rates grow which in turn is liable for a great profit earning for the hotel itself. Hotel uses
certain attractive strategies for the customer to increase the occupancy rate (Chen and Schwartz,
2008) .For the best judgement front office combines these three parameters completely. Occupancy
rate can be improved by the hotels by implying certain strategies like attractive packages and
innovative promotions, choosing the right market and collaborating with local market can be also
adopted for the betterment which can allure the customers to choose the hotel instead of preferring
other competitors(Bianchini, 2017).

REFERENCES
Books and Journal
Abdullah, A.A. and Haan, M.H., 2012. Internal success factor of hotel occupancy rate.
International Journal of Business and Social Science.3(22).
Ammachathram, A., 2018. Addressing the Challenges Facing Hospitality Academic Programs in
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159). Springer, Cham.
Bauer, T., 2017. Human rights obligations of international hotel chains. In Sustainability in
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Bianchini, A., 2017. An innovative methodology for measuring the effective implementation of an
Occupational Health and Safety Management System in the European Union. Safety
science. 92. pp.26-33.
Chen, C. and Schwartz, Z., 2008. Room rate patterns and customers' propensity to book a hotel
room. Journal of Hospitality & Tourism Research.32(3).pp.287-306.
Coenen, P., 2017. A qualitative review of existing national and international occupational safety
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Deeptha, R., 2018. The Preliminary Investigation of SSO Protocol for the Suitability of Mission
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Delp, L., 2015. Worker engagement in the health and safety regulatory arena under changing
models of worker representation. Labor studies journal. 40(1). pp.54-83.
Orfila-Sintes, F. and Mattsson, J., 2009. Innovation behaviour in the hotel industry. Omega.37(2).
pp.380-394.
Viglia, G., Minazzi, R. and Buhalis, D., 2016. The influence of e-word-of-mouth on hotel
occupancy rate. International Journal of Contemporary Hospitality
Management.28(9).pp.2035-2051.