What is the best metric to analyze hotel performance in terms of customer usage?

The occupancy rate is the most effective metric for analyzing hotel performance in terms of customer usage because it directly reflects the percentage of available rooms that are actually booked and occupied by guests. This metric provides a clear indication of demand for the hotel’s offerings and is critical for assessing how well the hotel is attracting guests relative to its capacity.

A high occupancy rate suggests that the hotel is successfully attracting customers and maximizing its resources, which is essential for operational efficiency and profitability. Conversely, a low occupancy rate may indicate underperformance in attracting visitors, necessitating further investigation into marketing strategies, service quality, or competitive positioning.

While the number of rooms available, revenue per room, and average room price are all relevant financial metrics, they do not directly measure customer usage in the same straightforward way that occupancy rate does. For example, revenue per room might be high, but that can sometimes occur alongside low occupancy if room rates are inflated or if the hotel has limited appeal to guests. Thus, the occupancy rate stands out as the most comprehensive reflection of customer engagement with the hotel.