Part 1 of eviivo’s Smart Pricing Series
Introducing the Smart Pricing Series
Whether you run a hotel, manage vacation rentals, or oversee a growing portfolio, knowing how to price effectively can transform your business.
That’s why we’ve launched the Smart Pricing Series – your step-by-step guide to building a winning pricing strategy. Each post focuses on one part of the journey – from tracking performance metrics and forecasting demand to using automation, promos, and psychology to boost revenue.
This first post introduces the key pricing metrics every accommodation owner and manager should track – and how to use them for better, faster, smarter decision-making.
What are pricing metrics and why do they matter?
Pricing metrics are the performance indicators that show how efficiently your accommodation generates revenue. They help you measure success, forecast demand, and set competitive rates.
Tip: eviivo Suite’s Performance Manager and Promo Manager lets you track these metrics automatically, then use them to manage pricing flexibly across OTAs and direct channels.
Key Metrics FAQ
Formula: Available Units × Number of Days in Reporting Period
Why it matters: This is the foundation for your occupancy, ADR, and RevPAR calculations.
Example: 10 rooms × 30 days = 300 room nights available.
Formula: Sum of All Booking Revenues for Sold Room Nights in Reporting Period
Why it matters: Your baseline income figure for calculating other performance metrics.
Formula: Total Room Revenue ÷ Number of Room Nights Sold
Why it matters: Shows the average price per sold room and helps benchmark your rates. Measures the average price you are able to command per room night.
Formula: (Room Nights Sold ÷ Available Room Nights) × 100
Why it matters: Measures how effectively you fill your rooms over the given reporting period.
Formula: ADR × Occupancy Rate
Why it matters: Combines price and occupancy to measure overall revenue performance. Consider it good news when RevPAR increases and bad news when it decreases.
Formula: Total Revenue ÷ Available Room Nights
Why it matters: Captures the total income per available room night, incorporating both bookings and the sales of any extras.
Formula: (Total Revenue − Operating Costs) ÷ Available Room Nights
Why it matters: Reveals profitability after expenses – the ultimate measure of performance.
Formula: Total Room Nights Sold ÷ Number of Bookings
Why it matters: Helps you identify when to impose or encourage longer stays, which reduces operational costs and improves profitability.
Formula: (Days Between Booking and Check-in) ÷ Number of Bookings
Why it matters: Helps forecast demand and identifies when to adapt promotions based on booking lead times.
Formula: Units × Days × ADR × Occupancy Rate
Why it matters: Enables accurate planning for costs, staffing, and profit goals.
Download eviivo’s guide “How to Build an Effective Pricing Strategy” – a free resource that shows you step-by-step how to track performance and optimize revenue.
Coming Up in the Smart Pricing Series
Followed by:
- Dynamic Pricing 101: How to Simplify Rate Changes and Boost Revenue
- How to Use Promotions and Packages to Drive Direct Bookings
- The Psychology of Pricing: Why Guests Say Yes (or No)
- Common Pricing Mistakes Every Property Should Avoid
- Building a Year-Round Pricing Calendar: When to Raise or Lower Rates
- How to Benchmark Your Prices Against the Competition
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