What is the definition of RevPar Index in the hotel industry?
RevPar index is a quantity that instigates from RevPar. It focuses on relating your hotels RevPar with the RevPar of the hotels in your competitive set. This calculation will allow you to see how well you are performing your deals and revenue management plans comparative to your rivalry.
The RevPar Index is able to show you what your alteration is relative to your competitors and what the opening itself is of value. If your hotel is for example 10% below the other hotels regarding RevPar Index it means that with an investment into your products/ amenities you might be able to close the gap and bind the revenue your competitor is currently able to capture. By having this information available you are able to validate an investment into your assets.
How to compute RevPar Index?
Your RevPAR / Overall RevPAR of the set = RevPAR index