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Revenue per Available Room (RevPAR)

Revenue per Available Room measures room revenue relative to all available rooms and can be calculated as room revenue divided by available rooms or ADR multiplied by occupancy.

Revenue per Available Room, or RevPAR, measures room revenue relative to the total room inventory available for sale during a period.

It combines information about both pricing and occupancy.

How It Is Calculated

RevPAR can be calculated as:

Room revenue
───────────────
Rooms available

or:

ADR × Occupancy rate

STR defines RevPAR as room revenue divided by available rooms and notes that it can also be calculated by multiplying Average Daily Rate by Occupancy. STR hotel benchmarking glossary

Example

A property has:

ADR: $200 Occupancy: 75%

RevPAR is:

$200 × 0.75 = $150

That means the property generated an average of $150 in room revenue for each available room during that period.

Why It Is Useful

Occupancy alone can favour selling more rooms.

ADR alone can favour selling rooms at a higher price.

RevPAR combines aspects of both.

That makes it a common measure for comparing room-revenue performance across periods.

What RevPAR Does Not Measure

RevPAR does not directly account for:

  • Restaurant revenue
  • Spa revenue
  • Tours
  • Retail
  • Parking
  • Operating costs
  • OTA commissions
  • Payment fees
  • Profit

Two properties with the same RevPAR can therefore have very different financial outcomes.

Why It Matters

RevPAR can help evaluate whether changes in pricing and occupancy are improving room-revenue productivity.

It is particularly useful in Revenue Management and Benchmarking.

Common Problems

Common interpretation problems include:

  • Treating RevPAR as profit
  • Ignoring non-room revenue
  • Comparing properties with different business models
  • Comparing periods with inconsistent available-room definitions
  • Using one period without seasonality context
  • Optimizing the metric without understanding channel costs

How to Improve

Interpret RevPAR alongside:

Use the metric to describe room-revenue performance, not the entire health of the business.