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Do you want to increase RevPAR? Make your employees happy!

When people feel appreciated and fulfilled they work better and with more energy: follow our three tips to get happy employees, spoiled customers and +31% productivity.

How to increase RevPAR through employee happiness - Smartpricing

If you have ever tried to scientifically measure the productivity of your hospitality facility, you have surely already heard of one of the most important indicators of revenue management: the RevPAR.

RevPAR is the revenue generated per available room and is critical to measuring the health and economic success of any type of lodging facility. 

It can be calculated simply by dividing the facility's revenue by the number of available rooms, or by multiplying ADR (Average Sales Rate) and OCC (Occupancy Rate). 

This second method allows you to isolate the elements that influence RevPAR and better understand how to take action to increase it.

What are the factors that influence OCC and ADR?

There are many elements to consider, but the main ones usually used as a safe bet are:

  • Demand trends
  • Presence of events or trade shows
  • Competition
  • Weather
  • Segmentation
  • Reviews
  • Facility characteristics
  • Quality of service

If you cannot act directly, do it indirectly

After evaluating all the elements just listed, you need to bracket off those that you cannot influence directly. For example, demand, event calendar, weather or competition are beyond your control, so you can only analyze them and try to use them as much as possible in your favor.

On reviews, segmentation, facility characteristics and service quality, on the other hand, you can do a lot! The secret is the same one that all accommodation owners repeat like a mantra: put people at the center.

Only in this case it's not your guests, but your employees. Think about the time and care you put into selecting your employees: they are the ones who, every day, together with you, write the story of your facility, no matter how big or small:

  • those in management, revenue and sales are responsible for market positioning and segmentation, having a major impact on the bottom line
  • who holds the role of Housekeeper, quality manager, treasurer and maintainer preserves and enhances the characteristics of the facility understood as a set of products and services
  • those who work at the front desk, those who are room managers and those who work in the kitchen determine the quality of service to guests
  • the teamwork to which each of these figures contributes makes up the final picture, the overall image that the facility presents to your guests. And which they then report in their reviews.

Valuing the intangible

Michele Ferrero, a visionary entrepreneur and inventor of Nutella, is constantly remembered for his foresight in managing his relationship with employees. 

From the very beginning he took care of their well-being because, as his son and successor Giovanni recalls, "he knew that the two most important items in a company are both intangible: reputation and human value."

Knowing how to recognize and develop human value means taking care of one's employees, fostering their professional growth, fulfillment, and thus also happiness. This might sound like a cliché or a catchphrase, but there is statistical data confirming the validity of this approach.

Taking care of your employees' happiness means increasing their loyalty (+76%), their energy (+106%), their ability to innovate (+300%) and retention (+44%). 

At the same time, stress (-74%), burnout risk (-40%), resignations (-51%) and sick leave (-66%) are reduced.

Finally, all this directly affects the growth of your accommodation, resulting in +37% in sales and +12% in profit.

(Sources: HBR, Gallup, Shawn Achor, Forbes)

Actions speak louder than words

It is easy to say that without the people who work there, a hotel would be anonymous and cold. It is more difficult to get to the table and identify concrete goals to define a real people strategy made up of concrete and consistent actions over time.

Motivating and valuing others requires not only a clear and far-reaching strategic vision, but also the ability to work on oneself and on one's way of relating to others. 

For example, it would be short-sighted to think that cultivating employee happiness automatically means endorsing less effort and commitment on their part.

Creating a serene work environment is about making sure that everyone has a way and space to feel satisfied and fulfilled. Don't you also feel more energized and work better when you are particularly motivated and engaged? 

Again, this is not an opinion, but science. Specifically, it is the science of happiness, namely its theorist Sonia Lyubomirsky, who posits that 40 % of our happiness is contingent on how we cope with life events. The remaining 50% depends on our genes and only 10% on what happens to us. 

Suddenly, happiness is revealed as a skill that can be trained: it is possible to learn how to be happy and make others happy.

Positive habits to be aware of and practice

Having a budget to devote to your people strategy is definitely an advantage: welfare, refresher courses or team-building events are initiatives that can make an important contribution to your employees' satisfaction.

However, there are three positive (and cost-free) practices that are the indispensable foundation on which to base all your actions:


It is all too easy to spot mistakes, point fingers and point out the consequences. It is less easy to know how to stop and appreciate all that is done well, without taking it for granted. 

Expressing sincere satisfaction with your employees' work is critical to confirming their value. Feeling appreciated means not only working better, but also gaining more responsibility and awareness of your own impact on the positive performance of the company.


Exercising trust is perhaps one of the most difficult challenges required of those who run a company. It is normal to want everything to work according to one's own patterns, often believed to be the only ones that are valid and capable of ensuring the success of the business. It may happen that you surround yourself with employees only to find that you are unable to delegate, and this can become a major problem in the long run.

Believing in the abilities of your collaborators and demonstrating your trust by letting them act independently does not mean "losing control“, but enjoying a privileged (and sometimes surprising) vantage point to gain a better overview, based on which you can modify or confirm your strategy.


It is possible to be authoritative without coming across as authoritarian or, worse, rude. Practicing kindness toward your employees means not only respecting them as people, but also setting an important example of the values you want your entire organization to be based on.

If you are wondering if this approach really can help you increase your RevPAR, the answer is yes! According to research done by Shawn Achor in The Happiness Advantage, pursuing employee happiness corresponds to a potential 31 percent productivity increase.

What to do to push RevPAR even further

If you've already implemented all the helpful tips for increasing your employees' satisfaction and happiness, but you want to take it a step further and give your RevPAR a boost, dynamic pricing is the solution!

Abandoning the fixed price list and adjusting prices to market demand is the only sure way to not lose turnover and, in fact, to increase it.

We know that analyzing demand trends in real time and without making mistakes is a daunting task--and not just for you! Even the largest hotel chains employ the support of sophisticated revenue management software, which takes advantage of artificial intelligence and machine learning to account for every slightest variation.

That's why we at Smartpricing wanted to make this technology available to every type of accommodation, even the smallest. 

Find out what we can do together to increase your RevPAR and, as a result, your revenue!