TestVariation
Definition
Revenue per Available Room (RevPAR) is a hotel performance metric that shows how much room revenue is generated per available room, whether that room was sold or not.
It is usually calculated as room revenue divided by available room nights, or as Average Daily Rate (ADR) multiplied by occupancy. RevPAR focuses on room revenue and does not include revenue from food, events, or other services.
How it works
RevPAR brings two important factors together: the average price of occupied rooms and the proportion of rooms sold. For example, a 100-room hotel operating for 30 nights has 3,000 available room nights.
- Room revenue for the month: €186,000
- Available room nights: 3,000
- RevPAR: €186,000 ÷ 3,000 = €62
The same result comes from an ADR of €100 multiplied by 62% occupancy: €100 × 0.62 = €62 RevPAR.
Key benefits
Used alongside ADR and occupancy, RevPAR helps hotel teams understand whether room revenue is improving because of stronger pricing, higher demand, or a combination of both.
- Compare performance: Track results by day, month, season, or year.
- Support pricing decisions: See how rate changes and occupancy shifts affect room revenue.
- Improve forecasts: Use a consistent KPI when reviewing actuals, budgets, and forecasts.
- Spot trends: Identify periods that may need closer analysis or a change in strategy.
Common use cases
Hotels use RevPAR in regular performance reviews and planning. It is most useful when the reporting period and room inventory are defined consistently.
- Reviewing monthly results with hotel owners or asset managers.
- Comparing actual performance with budget and forecast.
- Assessing demand around holidays, conferences, or local events.
- Evaluating pricing and occupancy trends across seasons.
