• American Plan (AP): a room type or package including three meals per day into the daily rate

  • Modified American Plan (MAP): includes breakfast and one of lunch or dinner

  • European Plan (EP): strictly accommodations with no meals included

  • TRevPAR: short for total revenue per available room and a useful metric to evaluate which guest types are spending the most and which profit centers are generating the most revenue

With the world already surging back into a state of travel, the aptly named American Plan should be on your radar for maximizing TRevPAR. Moreover, there is the notion that this period of ‘revenge travel’ won’t last forever, so you will need to anticipate this by developing solid programs to defend your profitability even when there are fewer overall guests in the market.

When approaching any hotel asset management or financial optimization consulting assignment, one critical area we review is the dining operations. This is because some golf, some drive to the property, some like spa treatments… but everyone eats. Thus, developing a great AP with all the right marketing and omnichannel distribution links can truly help to both pad margins and increase guest satisfaction to ensure good word-of-mouth or return visits.

And the ‘everyone eats’ mentality is gaining steam with the wider acceptance of this TRevPAR term over and above the classical RevPAR. Sometimes it’s not all that simple, especially when comparing the weekend getaway leisure guest to a midweek MICE group block where the latter may spend far less per guest but also use up less labor per guest. Consider these two guest profiles:

Guest ABC

  • Purchases suite at US$400 per night for two nights at BAR and double occupancy

  • Arrives and departs hotel by Uber

  • Dines entirely off-property

  • No additional purchases onsite

  • TRevPAR stays at US$400 per night

Guest XYZ

  • Purchases deluxe room at US$250 per night for two nights at B&B rate and double occupancy

  • Uses valet and overnight parking for US$50 during the entire stay

  • Eats breakfast (included) as well as dinner a la carte on-property for an average spend of US$150 each night, including alcohol

  • Uses the spa with a treatment purchase total of US$150

  • TRevPAR is US$500 per night

Looking at the latter, this B&B may work as a loss leader of sorts, luring guests in with more per-night value to arrive at a greater overall property spend. Thus, a big part of your strategy over the next two years should be to try to ensure more XYZ guests while retaining the ABC nightly rate. For this, there are manifold solutions, especially with the emerging of some fantastic prearrival upselling and cross-selling platforms that help to automate this TRevPAR optimization.

Whether it’s APs, MAPs or any other package, your hotel’s ongoing success requires a tailored approach to how to make operations and technology work with your local market conditions.

By Adam And Larry Mogelonsky