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CPOR (Cost per Occupied Room)

What is CPOR in the hotel industry? 

CPOR stands for Cost per Occupied Room and is one of the most important metrics in the hotel industry. It is a measure of the total cost of operating a hotel divided by the number of occupied rooms for a given time period. CPOR is used to track the efficiency of hotel operations and compare performance against competitors.

The most common causes of a high CPOR are:

  1. Poor Revenue Management: Poor pricing strategies and dynamic marketing can lead to decreased occupancy and lower average daily rates, resulting in a higher CPOR.
  2. Overstaffing: Hiring too many employees or having excessive hours for existing staff can lead to higher labor costs, resulting in a higher CPOR.
  3. High Utility Costs: Uncontrolled energy consumption can lead to higher electricity and water bills, resulting in a higher CPOR.
  4. Poor Maintenance: Not keeping up with regular maintenance and repairs can lead to a decrease in the quality of the room product and higher volume of issues, resulting in a higher CPOR.
  5. Ineffective Management: Poor operational management can lead to decreased efficiency, resulting in higher labor costs and a higher CPOR.

How is cost per occupied room calculated in a hotel? 

CPOR is calculated by dividing total operating expenses by total number of occupied rooms.

The CPOR formula is: CPOR = Total Departmental Operating Expenses / Total Occupied Rooms

For example, if a hotel has total costs of $100,000 and has 500 occupied rooms, then the CPOR would be $200 ($100,000 divided by 500).

How do you improve CPOR at a hotel property?

To improve CPOR at a hotel property, hoteliers can look for ways to reduce operating expenses, such as through energy efficiency measures, smart staff scheduling, and renegotiating vendor contracts.

Hoteliers can also use technology solutions like Contactless Check-In and Guest Messaging to improve overall staff efficiency and bring down costs. 

Contactless check-in systems do this by significantly reducing the amount of time spent by staff checking guests in. This lowers the number of agents needed at the front desk and has the added benefits of reducing waiting times and improving customer satisfaction. 

Guest messaging solutions enable hoteliers to communicate more effectively with guests through both direct and broadcast messages and have a similar efficiency-enhancing effect to Contactless Check-In. Leading guest messaging solutions will also leverage AI responses to answer some of the most common guest questions (e.g., What is the WiFi password?). This reduces the amount of time that front desk agents need to spend answering calls and emails. 

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