Measuring hotel performance: Do’s and don’ts for smarter tracking

They reveal what’s working, where you’re losing money, how guests feel about their stay and how well your property stands up to competition.

But here’s the catch, metrics are only valuable if they’re understood, trusted and used properly. Many independent hoteliers either track the wrong data, misinterpret what they see or get overwhelmed by too many numbers and not enough clarity.

This guide is here to help you cut through the noise. Whether you run a 20-room guesthouse or a growing boutique brand, we’ll walk you through the do’s and don’ts of hotel performance tracking and benchmarking with hands-on context to help you apply each lesson in your day-to-day hotel operations.

If you’re new to metric tracking, we recommend starting with our hotel metrics guide, which explains the most important metrics like Average Length of Stay (ALOS) and Revenue per Available Room (RevPAR), why they matter and how to improve them. And if you’re looking for practical ways to collect and manage performance data, don’t miss our deep dive on the tools you need to track hotel metrics efficiently.

Do: Benchmark against the right hotels

One of the most common pitfalls in hotel benchmarking is comparing yourself to properties that operate in a completely different space. Independent hoteliers sometimes fall into this trap because some local properties might appear to be good role models.

But, if they serve a different type of guest, have significantly more (or fewer) rooms or operate at a different price point, the comparison will distort your understanding of your own performance.

Imagine you're running a 20-room heritage inn that focuses on couples and weekend getaways. Benchmarking your Average Daily Rate (ADR) against a 250-room business hotel near the airport makes little sense even if it’s just down the road. They cater to corporate travelers, work with large travel agencies and operate on a completely different pricing model.

Instead, think about benchmarking like your guests would. If your property is fully booked, where else would your ideal guest stay? That’s your true competitive set. Your compset should include properties with similar:

• Location

• Type of accommodation

• Price range

• Rating

• Leisure facilities

• Business facilities

• Atmosphere

• Online exposure

• Breakfast

• Room types

• Flexible check-in and check-out

• Cancellation policy

Defining a focused and relevant compset helps you set realistic goals and track your growth relative to the part of the market you actually compete in.

Do: Make metrics a weekly habit

It’s easy to treat performance metrics as something you only review at the end of each quarter or worse, once a year when you're finalizing your budget. But by then, you’ve lost countless opportunities to course-correct.

You likely operate with a lean team (or on your own) and a packed schedule. That’s why metrics need to be embedded into your weekly workflow. Done consistently, this routine becomes a powerful tool for making better, data-driven decisions.

A practical review schedule might look like this:

• Daily: Look at occupancy, ADR, cancellations and check-in patterns. These are the operational indicators that show if you're on track for the day or need to adapt quickly.

• Weekly: Dive into booking pace, channel performance (OTA vs. direct) and guest review scores. This helps you spot short-term trends, evaluate guest experience and act before problems snowball.

• Monthly: Analyze broader performance trends across revenue management, Cost Per Acquisition (CPA) and operational metrics. This is where you reassess whether your marketing, sales and service strategies are working.

• Quarterly: Take a step back to look at the big picture. Evaluate your compset, reset strategic goals and review tech tools or vendor performance.

With just 30 minutes a week, you can build up to a rhythm that transforms your raw numbers into actionable insights.

Don’t: Focus only on occupancy

A high occupancy rate is often seen as the holy grail of hotel performance. But for independent hoteliers, this metric can be deceptive. Just because you’re full doesn’t mean you’re profitable. 

In fact, chasing full occupancy can lead you to undervalue your product and miss out on more lucrative opportunities.

Let’s say you’re consistently booking out at 100% occupancy, but most of those bookings are coming through discount OTAs or last-minute deals. Your rooms are full, but your ADR is low and your profit margins are being squeezed. Meanwhile, another hotel down the road is running at 75% occupancy, charging 30% more per night and generating higher total revenue with fewer guests.

That’s why it’s crucial to balance occupancy with other key metrics:

• ADR shows how much guests are paying.

• Revenue Per Available Room (RevPAR) combines rate and occupied rooms for a clearer revenue snapshot.

• Gross Operating Profit Per Available Room (GOPPAR) helps you see what you keep after costs.

If you focus only on occupancy, you’re looking at volume, not value. Independent hoteliers thrive when they deliver strong value to the right guests, not just the most guests.

Do: Focus on 5–8 core KPIs

With so many metrics available, it’s tempting to track everything. But more isn’t always better. 

If you try to monitor too many KPIs at once it creates information overload and makes it difficult to take meaningful action. As you likely have limited time and resources, simplicity is key.

Instead of tracking 20 different metrics, focus on a core set of 5–8 that align with your strategic goals. For example:

• If your focus is profitability: track RevPAR, ADR, GOPPAR and occupancy.

• If you want to boost guest satisfaction: focus on Net Promoter Score (NPS), online reviews and repeat guest ratio.

• If you're investing in marketing: track your advertising costs, website traffic, social media costs, and the amount of direct bookings via your conversion rate.

The goal is to track fewer things more consistently. This creates clarity, allows you to optimize trend spotting and makes it easier to take action.

Don’t: Ignore external market signals

Benchmarking against your compset is important, but don’t stop there. The wider travel market is constantly shifting and you need to stay in tune with those changes if you want to stay competitive.

Relying solely on your internal performance and compset can lead to blind spots. You might miss:

• New trends like bleisure travel, extended stays or work-from-anywhere guests.

• Local event cancellations or new festivals that influence booking patterns.

• New short-term rentals are emerging in your area.

• Regional or global economic shifts that affect traveler behavior.

Independent hoteliers need to be agile. Supplement your internal data with external insights:

• Monitor booking platforms like Google Travel and Booking.com for destination demand trends

• Keep tabs on competitors’ offers and pricing

• Talk to your guests about why they chose your property and what else they considered

Understanding the broader market context helps you position your hotel effectively and make smarter pricing and marketing decisions.

Do: Collect a complete performance picture

It’s easy to track the basics –occupancy, revenue and guest ratings– but true performance insight comes from digging deeper. 

Independent hotels often overlook critical metrics simply because they feel harder to measure. But tools today make it easier than ever.

What are you missing?

• Booking window: Knowing how far in advance guests book helps you time promotions and manage rates.

• Cancellation patterns: High cancellation rates could indicate issues with your booking policy, pricing or guest expectations.

• Ancillary revenue: Are you maximizing Food and Beverages (F&B) sales, spa treatments or add-on services?

• Guest segments: Are return guests spending more? Are families or business travelers driving your midweek stays?

Use your PMS, surveys, review platforms and even simple spreadsheets to capture these metrics. The more you understand who your guests are and how they behave, the better you can serve them and improve your bottom line.

Don’t: Rely solely on historical data

Historical data is helpful, but it can also be misleading. The world and the hospitality industry doesn’t stand still. If you’re basing today’s pricing, staffing or sales strategies purely on last year’s numbers, you may be missing crucial signals.

Think about how many things have changed in just the past few years:

• Traveler priorities have shifted (e.g., flexibility, cleanliness, remote work compatibility)

• New competitors may have entered your market

• OTA algorithms and search behaviors evolve regularly

• Economic factors affect travel demand in real time

Instead of looking only backward, blend historical trends with forward-looking indicators:

• On-the-books occupancy and pickup pace

• Google Trends and search behavior

• OTA demand forecasts

This gives you a more accurate picture of what’s happening now and where to go next.

Track what matters and act on what you learn

To truly leverage hotel performance metrics, ensure they're focused, contextual, and consistently measured, and then acted upon. That’s when they become a truly effective tool in your arsenal.

Avoid the trap of tracking too much, copying competitors or ignoring the broader market. Instead, focus on a small number of relevant KPIs and use your data to take action.

The insights you get from your KPIs should act as your roadmap to success. With the right structure and mindset, you can use metrics to drive growth, boost guest satisfaction, improve your pricing strategy and run a more efficient and profitable property.

Ready to take the next step? Explore our hotel metrics guide for definitions, formulas and improving your strategy and our tracking tools blog for systems that make it all manageable.