What Is RevPAR Room Type Index (ReRTI)?
If you are a hotel owner or manager, you already know that RevPAR is one of the most important metrics to track. But what if there was a better way to measure it?
That is where RevPAR Room Type Index (ReRTI) comes in. By definition, ReRTI is a ratio of room-type revenue to the percentage of inventory used for the given type. ReRTI takes into account not just the room rate, but also occupancy, length of stay, and even room type to give you a clearer picture of where your hotel's performance is falling short.
Many hoteliers may use this metric to measure the success of their hotel rooms while keeping each room’s type into consideration, but it is not just useful for hotels — it can help any business determine where they need to improve their customer experience.
Calculating ReRTI and Interpreting Its Value
While ReRTI is a proportion, several percentages are needed in order to calculate it. First, the metric requires you to know the % total RevPAR of a given type of room. Additionally, the % inventory used by the same rooms in said room type must be available. Dividing the first number by the second will give you the ReRTI value of that room type.
% Total RevPAR for a room type / % Inventory used for a room type = Room type’s ReRTI
If the ReRTI value calculated is lower than the value 1 for a standard room type, for example, this indicates that rooms of this type are performing exceptionally well, but rooms that might have more inventory being allocated to them, such as deluxe rooms, are performing worse than normal rooms. Likewise, if rooms using much of a hotel’s inventory have higher ReRTIs than other room types from the same facility, that means that they are more popular among guests.
Why Is ReRTI Useful?
But why use ReRTI as a metric? ReRTI is useful because it provides a global view of how each room type performs relative to others, showing which rooms are more profitable than others and why. It tells you how well each of your rooms is performing on both an absolute basis and compared to other rooms in your hotel — and it can help you better understand what customers want when they book their stay with you.
It is a quick and easy way to see how well some of your hotel rooms are performing compared to other types of rooms in your facility, but it can also be used as an indication of whether or not your own hotel needs to up its game. If some of your rooms have an especially low ReRTI number compared to other rooms in your hotel, then you may want to consider changing some rates or adjusting amenities given by the rooms that are not performing as well. ReRTI can help you make better decisions about where you invest your money and what kinds of renovations and improvements you need to do on your property.