Hotels Urged to Adopt 'Performance Engineering' for Profit-Focused Operations Amid Declining 2025 Flow-Through Rates
🛀 2025: hotels faced intense margin pressure, with The Americas' flow-through rates dropping to 18%. Labor and operating costs surged while booking behaviors shifted. Despite RevPAR increases, profitability declined, revealing its limitations as a metric. The industry needed a shift towards performance engineering, a discipline embedding profit-led operations. This requires four shifts: expanding datasets, aligning team mindsets, connecting actions to insights, and employing the right technology. The new approach focuses on GOPPAR for total profitability, not just revenue.
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