If you do not know what “RevPar” is keep reading. “RevPar” is defined as Revenue per Available Room or the total guest revenue divided by the total number of available rooms. ( STR Global maintains a useful glossery of hospitality industry terms.) RevPar is an important metric in the hospitality industry because it measures sold and unsold room revenue.
So, why is this important to real estate developers and hoteliers ? As the hotel industry rebounds and new properties are developed the competition for room revenue, especially in central business districts is heating up. How do you help ensure that your RevPar is high while also bringing economies of scale to your development ?
Develop a parcel which has two or three brands in or on the same property which share certain common facilities such as elevators, reservation systems, management and maintenance staff, kitchen facilities, parking facilities. Take the old Cincinnati Enquirer building as an example. This historic renovation in Cincinnati’s central business district is being renovated by SREE Hotels into a dual branded Homewood Suites and Hampton Inn. The project has been awarded Ohio Historic Tax Credits. When completed the development will operate two separate Hilton branded hotels which appeal to different types of consumers rather than one large hotel hoping that their target consumers fill all of their rooms every night.
Just makes sense !