Hola from this corner, Debra.

Any of your suggested percentages might work (but the one on the 18%+), yet they are a bit missleading, particularly if you relate them to rack rate.

To do the exercise the right way, it is much better to focus on the Room Profit Margin and the contribution that your Room Profit Margin will have to your G.O.P. or to your EBITDA.

To set-up a realistic Room Profit Margin goal you need to take into account a few metrics (essentially RevPar and CostPar which is predominantly Room related staff plus room operating cost), and a few references for benchmark purposes (average Room Profit Margin in your competitive set and/or in your location or destinations alike). Once you have that figure (let's say 68% Room Profit Margin), your staffing cost is pretty fix, so whatever is left can be allocated to the room operating cost and so to the turnover.

Sure, to make it accurately is a bit more complex, yet above pretty simple calculation will give you a good idean on where you stand.

Cheers
Pedro.-
Received on Tue Apr 4 18:14:50 2006