Managing multiple tourist properties and knowing how much each one earns does not mean knowing which one is truly the most profitable.
One property may generate more income than another and yet leave less profit. It may have higher occupancy but also higher commissions. It may bill a lot but consume too much in cleaning, maintenance, or supplies.
That’s why, when managing multiple accommodations, comparing only income or occupancy often leads to incorrect conclusions.
The Short Answer
To know which property is more profitable, you need to compare, at a minimum:
- income;
- expenses;
- operating result;
- margin;
- occupancy;
- ADR;
- RevPAR;
- commission costs;
- cost per booking;
- evolution over time.
The property that bills the most does not necessarily have to be the one that leaves the most money.
The truly important figure is how much profit each property produces in relation to the resources it consumes.
Billing and Profitability Are Not the Same
Let’s assume a manager oversees two properties.
Property A
Annual income: €45,000
Expenses: €24,000
Result: €21,000
Property B
Annual income: €38,000
Expenses: €13,000
Result: €25,000
Property A bills €7,000 more. But Property B generates €4,000 more in profit.
If we only look at sales, we might think that Property A is performing better. That is not the case.
The Margin Helps Understand the Difference
The margin indicates what percentage of income ends up as profit.
Margin = result / income × 100
Property A: €21,000 / €45,000 × 100 = 46.7%
Property B: €25,000 / €38,000 × 100 = 65.8%
The second property not only leaves more money but also makes much better use of each euro it bills.
Occupancy Can Also Be Misleading
Now let’s assume:
Property A: 90% occupancy
Property B: 73% occupancy
At first glance, it seems that Property A is clearly performing better.
But it may be selling nights too cheaply.
If the second property achieves higher rates and better controls its costs, it can generate more profit with fewer occupied nights.
That’s why occupancy, ADR, and RevPAR should be analyzed together.
ADR: How Much You Earn per Night Sold
ADR stands for Average Daily Rate.
It is the average price obtained for each occupied night.
ADR = income from accommodation / nights sold
For example:
Income: €3,000
Nights occupied: 20
ADR: €150
This figure allows for comparison of each property’s ability to sell its nights at better prices.
RevPAR: How Much Each Available Night Produces
RevPAR stands for Revenue per Available Room.
In a tourist property, it helps understand how much income is generated for each night that could have been sold.
RevPAR = income / available nights
Let’s assume:
Income: €3,000
30 available nights.
RevPAR: €100
Two properties can have the same ADR and completely different results if one has much higher occupancy.
But Neither ADR nor RevPAR Show Profit
This is a very important point.
A property can have excellent RevPAR and excessive costs.
- very high cleaning costs;
- high energy consumption;
- continuous maintenance;
- high platform commissions;
- too many discounts;
- higher management costs.
That’s why commercial indicators must be cross-referenced with financial data.
What a Manager Should Compare
| Indicator | Property A | Property B | Property C |
|---|---|---|---|
| Income | €45,000 | €38,000 | €42,000 |
| Expenses | €24,000 | €13,000 | €19,000 |
| Result | €21,000 | €25,000 | €23,000 |
| Margin | 46.7% | 65.8% | 54.8% |
| Occupancy | 90% | 73% | 81% |
| ADR | €137 | €158 | €145 |
In just a few seconds, it starts to become clear that the property that bills the most is not necessarily the one that performs best.
The Cost per Booking Also Matters
A property may generate many short bookings. This can increase cleaning, laundry, consumables, communications, check-ins, incidents, and workload.
Another property may have fewer bookings but longer stays.
Two properties with similar income can have very different operating costs.
That’s why it’s advisable to analyze average cost per booking and average profit per booking.
The Average Length of Stay Can Change Everything
Let’s assume two accommodations. Both sell 20 nights.
Property A receives 10 bookings of two nights.
Property B receives 4 bookings of five nights.
If each guest change costs €70 for cleaning:
Property A: 10 × €70 = €700
Property B: 4 × €70 = €280
The difference is €420 for the same occupied nights.
The average length of stay can have a huge impact on the margin.
Commissions Also Need to Be Considered
Not all channels cost the same.
A property that heavily relies on certain platforms may bear a higher acquisition cost than another with more direct bookings.
That’s why it’s important to know:
- percentage of bookings by channel;
- average commission;
- total distribution cost;
- percentage of direct bookings.
A property that bills €50,000 while paying €8,000 in distribution does not have the same result as another that bills the same while paying €3,000.
Which Properties Require More Work
For a manager, there is also another cost that often does not appear directly in the accounting: time.
A property may continuously generate guest questions, maintenance issues, booking changes, complaints, difficulties with owners, or cleaning incidents.
Another may operate almost on its own.
If both generate the same management commission, they do not provide the same value to the manager.
That’s why a professional manager should know not only the profitability for the owner but also the profitability that each property represents for their own business.
Profitability for the Owner and for the Manager
Owner
Wants to know: How much money does my property generate after its expenses?
Manager
Needs to know: How much income do I get from managing this property and how much work and cost does it generate for me?
A property can be very profitable for the owner and unattractive for the manager, or vice versa.
A good system should be able to analyze both aspects.
Comparing Periods is Also Essential
The snapshot of a single month can be misleading.
August may be extraordinary and November very weak.
That’s why each property should be compared with the previous month, with the same month of the previous year, with the annual cumulative, with its budget, and with the rest of the portfolio.
This allows for trend detection.
A Small Drop Can Signal a Bigger Problem
Let’s assume a property with these results:
- May: €3,100 profit
- June: €2,900
- July: €2,600
- August: €2,300
The property is still making money, but the result has been declining for four months.
Costs may be increasing, the average price may be decreasing, or expenses may be rising.
If we only look at the current result, we may miss the signal.
What Questions Should a Manager Be Able to Answer?
A manager with ten, twenty, or a hundred properties should be able to quickly know:
- Which bills the most?
- Which leaves the most profit?
- Which has the best margin?
- Which has the highest occupancy?
- Which sells at the best price?
- Which incurs the most expenses?
- Which pays the most commissions?
- Which requires the most work?
- Which is improving?
- Which is declining?
And, above all: What decision should I make in each case?
Ranking Properties is Not Enough
Creating a ranking can be useful.
But knowing that a property is in position 8 out of 10 does not solve anything.
What’s important is understanding why.
It may need to raise prices, reduce a promotion, improve the minimum stay, seek more direct bookings, renegotiate a service, review costs, improve conversion, control consumption, or adjust availability.
Data has value when it leads to action.
The Problem with Spreadsheets
With a few properties, it’s possible to maintain this analysis manually.
But each property adds bookings, income, expenses, commissions, owners, settlements, calendars, and incidents.
The problem does not grow linearly.
Each new accommodation multiplies the comparisons that need to be made.
From Managing Properties to Managing a Portfolio
A professional manager does not manage isolated properties.
They manage a portfolio of assets.
This means they need a global view while also being able to drill down into the details of each property.
Gatavia approaches this management from a financial perspective.
Not just: “I have 25 properties.”
But: “I know what is happening financially in each of my 25 properties.”
What they generate. What they spend. What margin they leave. What is changing. And where there is an opportunity or a problem.
The Real Question
Knowing which property is the most profitable is useful.
But the really interesting question is another:
Why is it more profitable and what can I learn from it to improve the rest?
That is the leap from observing data to managing a business.
And that is precisely the logic of a financial director applied to tourism management.
More clarity. More time. More life.