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What RevPAR is and why it's the key metric for your hotel
· 5 min read
RevPAR, ADR and occupancy: the trinity of hotel revenue management, explained with a numeric example.
RevPAR (Revenue per Available Room) is the metric that best measures the commercial health of a hotel or guest house, because it combines price and occupancy in a single figure.
The formula
RevPAR = ADR × Occupancy. ADR is the average daily rate; revenue per available room is the RevPAR.
Example
- Hotel A: ADR €80, occupancy 80% → RevPAR €64
- Hotel B: ADR €100, occupancy 60% → RevPAR €60
- Hotel A invoices more per available room, even with a lower price.
How we use it in revenue management
We compare RevPAR vs. the same month last year and vs. the average RevPAR of the compset (competing hotels). If our RevPAR grows faster than the compset's, we're gaining share.
If you'd like to review your hotel's RevPAR and benchmark it, write to us.
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