Which key performance indicator assesses a hotel’s financial health?

The Total Revenue per Available Room (TRevPAR) is a critical performance indicator for assessing a hotel’s financial health because it encompasses all sources of revenue generated by the hotel, not just room sales. This metric provides a more comprehensive view of a hotel's performance by taking into account revenue from various areas such as food and beverage, events, and ancillary services, in addition to room revenue.

By analyzing TRevPAR, hotel management can gain insights into how effectively the property is maximizing its entire revenue potential, guiding strategic decisions to improve overall financial performance. This differs from other indicators that focus strictly on room revenue or occupancy levels, offering a broader perspective on financial health and operational efficiency.