Images from the CBM Center (Condition Based Maitenance)

The ability to find measurable hidden value in a hotel, before acquisition, provides hotel buyers with foresight to confidently negotiate and recognize undetected long term benefits. The Optimization Scoring Metric, calculated in the due diligence phase of acquisition, uncovers treasures that could never be seen before.

The missing metric, in hotel industry analytics, is the Revenue Optimization Metric. “The Metric” allows prospective hotel buyers to identify unremarkable performance in revenue generation. The substitution of unremarkable with remarkable is the space in which value is created. The metric/score quantifies the shortfall and then projects potential profitability based on a typical scoring range (see Exhibit “C”, below).

What is the Optimization Metric?

The Optimization Metric provides hotels with an evaluation of the effects that (1) complete channel cost, (2) channel mix and (3) the merchant model, have on profit and cash deposits (I refer to these as the “critical factors”).

The calculations involved in determining the Optimization Score place all reservation-vendors on an equal platform in measuring production and removes the flawed inaccuracies created by the Merchant Model. Needless to say, in a data driven society flawed metrics present big problems. These flaws, are present in the traditional calculation of hotel metrics. Follow the link, in the paragraph below, for more on “the optimization metric and flawed industry metrics”.

Source: http://www.hospitalitynet.org/news/global/154000320/4074633.html