Chapter 4

• tourism sector is key activity for Spanish economy

  • contribution to the Gross Domestic Product

  • create employment

• Likewise, the tourism sector has traditionally demonstrated an enormous tractor effect on other sectors of the the Spanish economy that directly or indirectly have benefited from the itself, such as trade or real estate activity, among Many others. An importance that has become clear during the year 2020 as a consequence of the effects that the pandemic of COVID-19 in Spain. The direct and induced effect of tourism on economic activity has been felt throughout the Spanish geography, although with unequal intensity depending on the different characteristics of the various regions and destinations, a fact thatis clearly highlighted when analyzing the different levels of productive specialization of the territories.

A productive specialization, that of Spain and a good part of its autonomous communities, which also means a high level of dependencyof an activity that, although it is true, has not stopped growing in recentyears, it is immune neither to the economic situation nor to competitionfrom other destinations, nor to the accelerated changes that the travel industry in recent years as a result of sociodemographic changes, digitization and aspects related to greater environmental awareness.

• Spain is the third European country in number of accommodation places regulated, with more than 3.4 million accommodation places in hotels, campsites, tourist apartments and rural tourism accommodation, more 50% superior category, 4 and 5 stars; and more than 17,000 rural tourism establishments according to data from the National Institute of Statistics (2019)

• It has 165,686 km of roads, 15,618 km of rail network, which 2,482 are high- speed, the third largest network in the world and first in Europe, behind China and Japan and 48 venues in the network of aerodromes according to data from the Ministry of Public Works (according to the latest data available for the year 2018)

• It is a power in terms of tourism related to nature, being the second country in Europe in surface area of natural spaces with 15 NaƟonal Parks and 131 Natural Parks, and is the first country of the world in UNESCO Biosphere Reserves with 52, according to data of the Ministry for the Ecological Transition (2019)

• Key performance indicators (KPIs) quantitatively measure an organization’s performance on various factors that, when taken together, will determine goal achievement.

• They identify areas where improvement is needed. In tourism, a goal may be set to increase visitor revenues by a certain percent. To reach that goal stakeholders agree to measure factors that must be achieved.

• KPIs vary by company and product type:

  • An airline may set a monthly goal to be on time 90 percent of the time. A key performance indicator will be the number of early-morning flights that leave on time as they set the pattern for the day

  • In a restaurant a goal may be to serve 5,000 meals in a month. A key performance indicator may be the number of daily reservations taken

  • A destination may measure daily tourist arrivals at the airport.

• In simple terms, occupancy rate refers to the number of occupied rental units at a given time, compared to the total number of available rental units at that time. It is one of the most popular KPI’s in the hotel industry for Revenue Management, highlighting how much of the available space in a hotel is actually being utilised

• The occupancy rate of a hotel is expressed as a percentage. So, for example, if a hotel has 100 rooms available to be sold and 100 of those rooms are occupied, the occupancy rate would be 100 percent. If the same hotel had 60 rooms occupied, the occupancy rate would be 60 percent

• How to Calculate Occupancy Rate

  • The occupancy rate KPI can be calculated with the following formula:

  • Occupancy Rate = Number of Occupied Rooms / Total Number of Available Rooms

  • Example: If your hotel has 220 rooms and 210 of the rooms are occupied

• The average daily rate (ADR) shows how much revenue is made per room on average. The higher the ADR, the better. A rising ADR suggests that a hotel is increasing the money it's making from renting out rooms. To increase the ADR, hotels should look into ways to boost price per room

• The average daily rate is calculated by taking the average revenue earned from rooms and dividing it by the number of rooms sold

• How to Calculate ADR:

  • If a hotel has $50,000 in room revenue and 500 rooms sold, the ADR would be $100 ($50,000/500).

• RevPAR is calculated by dividing a hotel's total room revenue by the total number of available rooms in the period being measured

• RevPAR is calculated by multiplying a hotel's average daily room rate by its occupancy rate

• RevPAR reflects a property's ability to fill its available rooms at an average rate

• For example, a hotel has a total of 150 rooms, of which the average occupancy rate is 90%. The average cost for a room is $100 a night. A hotel wants to know its RevPAR so it can accurately assess its performance. The hotel manager can calculate the RevPAR as follows:

  • ($100 per night x 90% occupancy rate) = $90.00

  • The hotel's RevPAR is, therefore, $90.00 per day.