Return On Investment (ROI)

What is the definition of ROI in the hotel industry?

ROI stances for: Return on Investment

ROI is a productivity ratio used to calculate the gain or loss made on an investment. In other words, it specifies how much money was made on an investment, stated as a percentage of the buying price/ initial investment.

How to calculate ROI:

Formula: ROI = (investment revenue – investment cost) / (investment cost)

This formula is pretty simple and is adjustable to altered kinds of investments such as marketing drives or hotel asset achievements. However, its plasticity has a disadvantage; this ratio can be wrought conferring to one’s insight. The use of the same inputs is vital, to have a good judgment.

Also note that this pointer does not take the time worth of money into contemplation.