What is the meaning / definition of RevPar Index in the hospitality industry?
RevPar Index, is a measure that originates from RevPar. It focusses on comparing your hotels RevPar with the RevPar of the hotels in your competitive set. This calculation will allow you to see how well you are executing your sales and revenue management strategies relative to your competition.
The RevPar Index is able to show you what your variance is relative to your competitors and what the gap itself is worth. If your hotel is for example 10% below the other hotels concerning RevPar Index it means that with an investment into your products/ services you might be able to close the gap and harness the revenue your competitor is currently able to capture. By having this information available you are able to justify an investment into your assets.
If you consistently keep an eye on your competitors RevPar Index your able to see if your rate and occupancy strategies are working.
So how to calculate RevPar Index?
Your RevPAR / Overall RevPAR of the sample set = RevPAR index
The RevPar Index of your hotel will be shown as a percentage.