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Setting goals to measure success

08 September 2022
The hospitality industry has had a few challenging years, and in some parts of the world, the industry is still just starting to recover. But, even if there are a few dark clouds on the horizon, hotels need to start dreaming again and set new goals for where they want to be in the future. Leave the crisis mentality behind and start working on a better future. Create a vision, set goals and milestones, and start moving the team towards a bright future.


All hotels once envisioned becoming something for their guests in the destination. Unfortunately, the pandemic halted most plans, and the focus shifted to saving the business from going under. Revisit and revitalize the vision based on consumer behavior and preferences changes and then craft a few clear sentences to engage and energize the team. Even if the vision is easy to understand, it isn't easy to measure, and therefore hotels need goals and milestones to ensure that the business is moving in the right direction.


Goals are more specific and measurable. They also have to be attractive, engaging, and reachable. Otherwise, plans can backfire and alienate the team. Goals should create a positive vibe in the hotel and not be a burden for management and employees.
Hotels should focus on measuring the most critical success factors and limit the number of goals. Too many goals will confuse the team due to a lack of focus and dilute each goal's importance. Instead, carefully select a few crucial goals and focus on these.

Critical success factors

Every hotel has specific critical success factors, but there are some broad critical success factors for all hotels.

Guest satisfaction

The guest is the reason for the business of hotels. Therefore, guest satisfaction is a critical success factor. Great reviews and top ranking on review websites build the hotel's reputation, which leads to higher employee engagement (who would not want to work in a successful hotel?), lower marketing costs, and higher pricing power. Hotels can measure guest satisfaction as the number of reviews, the score, and the recency. Net Promoter Score is another way of measuring guest satisfaction, and by asking all guests upon check out to give the hotel stay a score, the hotel will have an early warning system for guest satisfaction. Select a measurement for guest satisfaction and set a goal for this critical success factor.


Revenue is essential for a hotel to stay in business. There are only two ways to increase revenue in a hotel. Attract more guests and sell more to each guest. Hotels are better at attracting guests than selling more to each guest. The first thought is that for a resort hotel, both ways to increase revenue are crucial while attracting guests is essential for a B&B where there is not much more to sell than a hotel room. Selling more to each guest also includes selling at a higher rate and increasing the length of stay, so selling more to each guest is also vital for a B&B. Hotels must measure the volume, such as stays, room nights, and guests. Hotels must also measure the average revenue per stay, room night, and guest. Select one measurement for volume and one for average revenue. The traditional measurement RevPAR is a mix of volume and average rate, and the newer measurement TrevPAR is a mix of volume and average revenue. Hotels can set goals using these measurements as well. Select one or two measures for revenue and set a goal for this critical success factor.

Market share

It is tough to capture a fair share of the market every single day. All hotels leave money on the table for their competition. All hotels are different in their revenue mix depending on the facilities in the hotel, products, services, location, and many other factors. Comparing hotels with each other is challenging, but benchmarking is still the closest method to a good comparison. The benefit is that the hotel will understand the size of the market and estimate how well the hotel captures the demand. The most popular measurement is Revenue Generation Index (RGI). Due to the flaws in comparing different types of hotels, hotels can still measure the change in RGI to understand if they are losing or winning market share. Set a goal for the critical success factor "change in RGI."

Other measurements

Hotels traditionally have too many measurements. However, the three critical success factors above are essential for the top line in the profit and loss statement. Without a healthy total revenue, a hotel cannot succeed. In addition, profit and profitability are critical measurements, and the hotel needs to select a few profitability measurements and set goals for this critical success factor.