The 6 (+6) Crucial KPIs Every Hospitality Business Should Be Tracking

2023 was mainly better than expected for companies in the hospitality sector. In the hotel space, occupancy rates were up 10%, and global RevPAR (revenue per available room) increased by 17%. (France was a happy outlier, with RevPAR up 123% — oui!) The restaurant space reported mixed results. While openings increased across Canada in 2023, the growth hasn’t yet translated positively to the bottom line, as food costs rose nearly 5%. We’re sharing these hospitality industry key performance indicators (KPIs) with you for a reason. KPIs are more than numbers. They are metrics that drive meaningful action and help you align your business’s broader objectives. 

What KPIs should your hospitality business be tracking — how and why? We encourage you to check out this whitepaper from Sage Intacct for an in-depth look at the Six Crucial KPIs You Should Be Tracking for Your Hospitality Business. But before you do, here’s our spin on the subject.

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Six “Must-Have” KPIs in the Hospitality Industry

Here’s our take on six crucial KPIs you should track in your hospitality business. We’ve deliberately not duplicated those from the Sage Intacct whitepaper— so you’ve got 12 to consider! 

1. Guest Satisfaction Scores: Customer feedback is vital. These scores reflect the quality of service and guest experience, influencing repeat business and reputation. These scores are typically calculated by collecting data through surveys on a scale (e.g., 1-10). Guests rate their experiences, and the scores are averaged to determine the overall satisfaction score. 

2. Labour Cost Percentage: This KPI measures the proportion of total revenue spent on labour, which is critical for budgeting and staffing decisions in the restaurant industry. Labour cost is calculated as total labour costs divided by total revenue, then multiplied by 100.


3. Menu Item Profitability: This is an analysis of the profitability of individual menu items, which assists in menu design and pricing decisions. It’s calculated as the item’s selling price minus the cost of goods sold for the item (including ingredients and labour). 

4. Peak Hour Analysis: Identifying the busiest hours for the restaurant, which is crucial for staff scheduling and resource allocation. This “KPI” is more of a data analysis process than a simple calculation. Sales data is reviewed to identify times with the highest sales volume or customer traffic. The data is then represented as a percentage of sales or customer count during peak hours compared to off-peak hours. 

5. Cost Per Occupied Room (CPOR): This helps you understand the direct costs of servicing a room, which is crucial for managing profitability. CPOR is calculated by dividing total room costs by the number of rooms sold. 

6. Employee Satisfaction and Turnover Rates: In an industry facing staffing challenges, monitoring employee satisfaction and turnover is key to maintaining service quality. Employee satisfaction is often measured using survey methods, similar to guest satisfaction, and summarized into an average score. The turnover rate can be calculated as the number of employees who left by the average number of employees during the period multiplied by 100. 


Why Real-Time Performance Monitoring Is Essential

To build on your success, it’s essential to be able to measure and monitor business performance in near real-time. Real-time monitoring is made simpler when you have access to accurate, meaningful KPIs that allow you to: 

  • Adapt to Market Fluctuations: Real-time KPIs allow your business to adjust strategies and operations quickly with changing consumer preferences and economic conditions.
  • Optimize Revenue Management: Real-time data is critical to maximizing revenue in a landscape where room rates and occupancy levels fluctuate significantly.
  • Monitor Staffing and Service Quality: As the industry faces continuing staffing challenges, real-time KPIs can help you manage the workforce efficiently, ensuring service quality is maintained.
  • Gain Predictive Analytics: Leveraging real-time data for predictive analytics can aid in foreseeing market trends, helping your business stay a step ahead.

Sage Intacct Hosts The Metrics

We’ve shared our list of critical KPIs and why they are so essential. But how can you gain access to hospitality KPIs? 

Sage Intacct Hospitality Accounting Software is designed to help you analyze and improve the performance and profitability of your hospitality business. It collects the data required to calculate the essential KPIs and makes it simple to view and share results. With deep integration between industry-leading CRM applications like Salesforce, plus payroll, HRIS, and hospitality management applications, Sage Intacct can serve as the nerve center of your entire operation. 

Sage Intacct is built to support multi-property hotels, restaurants, and other hospitality industry businesses, giving you real-time actionable insights that put information into decision-makers’ hands quicker and with less effort. 

Embracing a Data-Driven 2024

The hospitality industry’s path in 2024 and beyond is filled with opportunities and challenges. KPIs act as a compass, guiding your hospitality business through the inevitable market fluctuations, enabling swift strategic shifts, and ensuring resilience in the face of uncertainty. Remember to download the whitepaper, 6 Crucial KPIs You Should Be Tracing For Your Hospitality Business. Then, contact us to learn more about Sage Intacct for the hospitality industry.


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