Pearson New International Edition International pcl tp indd 1

REVENUE MANAGEMENT
RevPar index
Assessment and recommended action
Far below 100%
Management is ineffective. Actions: Evaluate room rates in conjunction with
occupancy index. If the occupancy index is near or above 100%, increase
rates. If the ADR index is near or above 100%, consider increasing discounts
during slower periods to maximize RevPar. If both indexes are substantially
below 100%, reevaluate the competitive set.
Below 100%
Management is less than effective. Actions: Evaluate room rates in conjunc-
tion with the occupancy index. If the occupancy index is below 100%, reduce
rates. If the ADR index is below 100%, consider raising rates or eliminating dis-
counts during high-demand periods.
At (near) 100%
Management is effective. Action: Monitor occupancy and ADR indexes to
maintain no more than a 10-point difference between these two measures.
Above 100%
Management may be effective. Actions: Evaluate room rates in conjunction
with the occupancy index. If the occupancy index is above 100%, increase
rates. If the ADR index is above 100%, consider increasing discounts during
slower periods to further maximize RevPar. If more than 10 percentage points
separate the two indexes, take corrective action to improve the lower index.
Far above 100%
Management (or ownership) is less than effective. Actions: Evaluate the com-
petitive set for appropriateness of fit; increase rack rates; aggressively seek to
increase ADR during high-demand periods; consider building additional room
capacity.