What RevPAR measures.
RevPAR is revenue per available room. It takes your room revenue and spreads it across every room you had to sell, including the ones that sat empty. That last part is why operators reach for it: occupancy tells you how full you were, rate tells you what you charged, and RevPAR tells you how well you did at both.
The RevPAR formula.
There are two ways to write it, and they give the same answer.
RevPAR = Room revenue / Available room-nights
RevPAR = ADR x OccupancyAvailable room-nights is your sellable rooms multiplied by the nights in the period. Ninety rooms across a thirty-night month is 2,700 available room-nights, whether or not anyone slept in them.
Use the first version when you have a revenue figure in front of you. Use the second when you’re modelling a change and want to see which lever moved the number.
A worked example.
Say a property has 120 rooms and you’re looking at a 30-night month. It sold 2,880 room-nights and booked $432,000 in room revenue.
| Step | Working | Result |
|---|---|---|
| Available room-nights | 120 rooms x 30 nights | 3,600 |
| Occupancy | 2,880 / 3,600 | 80% |
| ADR | $432,000 / 2,880 | $150.00 |
| RevPAR | $432,000 / 3,600 | $120.00 |
And the cross-check: $150.00 ADR x 80% occupancy is $120.00. Same number, both roads.
RevPAR, ADR, and occupancy side by side.
The three get used interchangeably in conversation, which is how a good ADR month gets mistaken for a good month.
| Metric | Formula | What it answers |
|---|---|---|
| Occupancy | Rooms sold / available room-nights | How full were we |
| ADR | Room revenue / rooms sold | What did we charge the guests who came |
| RevPAR | Room revenue / available room-nights | What did every room we owned earn us |
ADR only counts the rooms that sold, so it flatters a quiet month at a high rate. Occupancy ignores price, so it flatters a full house you discounted to fill. RevPAR is the one that notices both.
Reading the number.
RevPAR is most useful against itself. Compare this month to the same month last year, or your figure to your comp set, and the direction of travel tells you more than the absolute value does. A single month in isolation mostly tells you what season it is.
When it moves, only two things can have caused it. Either you sold more room-nights or you earned more per room-night. Splitting the change into those two parts is usually the fastest way to work out what actually happened.
One caveat worth keeping in mind: RevPAR only sees rooms. A property earning well on food, spa, parking, or late checkouts is doing better than its RevPAR suggests. TRevPAR and GOPPAR exist to catch the rest of it.
To pull either half apart on its own, use the occupancy calculator or the ADR calculator.
