Top 4 Travel and Tourism KPIs
This article will discuss our top four Key Performance Indicators that we recommend when working with clients from the travel and tourism sector or working in the sector yourself. These KPIs are crucial in measuring the overall performance of tourism companies, as they show how well businesses are performing across the board without getting mired down by too much detail or data collection.
With a lot of different offerings, the tourism industry can be a challenging one to measure Key Performance Indicators for. You must ensure you keep your standards high to make sure customers return, and keep track of many moving parts.
What are Key Performance Indicators (KPIs)?
Key performance indicators are measurements within an organization that provide a simple way to determine how well it is performing. They will vary depending on your business, sector, and location.
When should I use a Key Performance Indicator?
Always. KPIs should be used to measure how well you are doing towards achieving your goals. It allows you to keep track of the key elements in your business and align them with current trends. KPIs can help identify problems, opportunities for improvement, or changes that need to occur because they allow you a bird's eye view
KPI 1: Customer satisfaction
A crucial KPI in the travel and tourism industry, you need to measure this reputation metric to evaluate the quality of your services. You want to aim for a high customer satisfaction rate, as that will highlight brand loyalty. In turn, you’ll notice an uptick in repeat business and recommendations.
How can you measure customer satisfaction in the tourism industry?
Try creating a customer satisfaction scorecard, ask your customers about their experience through surveys as part of your entry process (just make sure it doesn't get in the way of the user experience!). If not, try to find out if they're satisfied by measuring the number of complaints or compliments received as an indicator for customer satisfaction ratings. A more refined example of customer satisfaction KPIs can be the NPS score (Net Promoter Score).
What is a Net Promoter Score?
A Net Promoter Score (NPS) is a Key Performance Indicator measuring customer loyalty. The higher the score, the more likely it is that customers will engage with your business again in the future. NPS surveys ask respondents to answer one question: on a scale of 0-to-100, how likely are you to recommend our company
KPI 2: Number of visitors in a given time period vs transactions
This is a crucial Key Performance Indicator to measure as having a lot of guests or visitors may seem like everything is going well but can become increasingly misleading in the long-term if they're not spending any money.
The threshold for success here will vary on the industry and how you adjust will change as well. For example, those in the hotel industry may want to try and increase bar sales once they have people in the building. Tourist destinations may want to look at increasing sales of souvenirs or refreshments once someone's bought admission.
What should I do for my business if I'm not sure?
Speak to peers or experts in your industry; different industries, regions, and countries will have different economies, different KPIs, and potentially even a different solution to the same problem.
KPI 3: Staff turnover
In normal operating conditions, you can measure this KPI to identify any problems with staff retention. If staff members aren’t sticking around, you need to look at why. If people are leaving, you could be making a big loss on training time, wages, and even severance packages. It’s much cheaper for you to retain existing staff.
How can I find out why my staff members are leaving?
There are a few ways to discover why your employees are leaving. You can survey them or ask for feedback, and you might even want to do exit interviews with people who have left the company recently. However, it is better to speak to your employees before they leave and stop them from leaving in the first place!
KPI 4: Total revenue per available room
Tracking your total revenue per available room in the hotel industry highlights how much revenue your business is generating per available room. This key performance indicator is calculated using total income from all sources rather than just that earned by each room. If you’re not earning as much as you need per room, look at benchmarked results from your industry standard to see if you’re charging the correct price.