NASHVILLE, Tennessee — The next big step for revenue management in the hotel industry will be an evolution to a greater focus on profitability, according to Chris Cheney, vice president of hotel performance and analytics at Stonebridge Companies.
Speaking to Hotel News Now during the 2021 Hotel Data Conference, Cheney said the COVID-19 pandemic has only accelerated the growing focus on profitability.
"Revenue management needs to become profit management more so than ever," he said. "That was already our philosophy before the pandemic, but now, it's crucial that you really have an integrated strategy that takes into account the operating capacity of the hotel team and takes into account the guests' wants and needs as they continue to evolve."
He said key focus areas should be changes in length of stay, channel mix and "all of the things that can really drive profitability to the bottom line."
Cheney said gross operating profit per available room — or GOPPAR — is the performance metric more people should be paying attention to.
"We've talked about GOP per available room before, but it's not really made it to the top of the food chain in terms of industry acronyms," he said.
He said shifting the conversation from just revenue to revenue and profits can elevate the conversations for hotel leadership teams.
"I think GOPPAR does number things," he said. "One, it really tells you about your profitability given your top-line revenue strategy, but it also tells you about how much you're maximizing profit in your building, right, because it's a per-available-room stat, not per occupied room. So you can really see, given the total keys in the hotel, what is your optimal mix of occupancy and rate to get to that best potential profit margin."
For more from Chris Cheney's interview with HNN, watch the video above.