Revenue Per Available Room - a key performance metric that measures a hotel's ability to fill rooms at profitable rates.
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.
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.
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
