RevPAR
Revenue Per Available Room - a key performance metric that measures a hotel's ability to fill rooms at profitable rates.
Definition
RevPAR (Revenue Per Available Room) is one of the most important performance metrics in the hotel industry. It measures how well a hotel fills its available rooms at an average rate. Unlike occupancy rate alone, RevPAR combines both occupancy and average daily rate (ADR) to give a complete picture of revenue performance. It's calculated by multiplying the occupancy rate by ADR, or by dividing total room revenue by the number of available rooms.
Why it matters
RevPAR is crucial because it reflects both pricing strategy and demand. A hotel can have high occupancy but low RevPAR if rates are too low, or high ADR but low RevPAR if rooms sit empty. By tracking RevPAR, revenue managers can optimize the balance between occupancy and rate to maximize total revenue. It's also the standard metric for comparing performance across properties and against competitors.
How to calculate
There are two ways to calculate RevPAR:
RevPAR = Occupancy Rate × ADR or RevPAR = Total Room Revenue ÷ Available Rooms
Example
If a 100-room hotel has 75% occupancy and an ADR of €150: RevPAR = 0.75 × €150 = €112.50 Alternatively: If the hotel earned €11,250 in room revenue: RevPAR = €11,250 ÷ 100 = €112.50
Best practices
- 1Track RevPAR daily, weekly, and monthly to identify trends
- 2Compare RevPAR to your competitive set (RevPAR Index)
- 3Use RevPAR alongside TRevPAR to include ancillary revenue
- 4Segment RevPAR by room type and booking channel
- 5Set RevPAR targets based on historical data and market conditions
Related Opally resource
Use room revenue, available rooms, occupancy, or ADR in Opally's free calculator.
Calculate your RevPAR