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Revenue Management Glossary

Revenue per Available Room (RevPAR)

Revenue Per Available Room (RevPAR) is perhaps the most reliable and common measure of success for a hotel. As opposed to ADR, RevPAR takes into account your occupancy rate. For example if using ADR as a measure of success, you could simply sell one room a year at $1000 and your ADR would remain $1000 but you have no in fact been very successful. 

By calculating your RevPAR and taking into account your occupancy, you are creating a more balanced and truthful display of how well your business is doing. 

RevPAR = Average income per night ÷ Total number of rooms 

OR 

RevPAR = Average Daily Rate  (ADR) x Occupancy Rate 

For more information on RevPAR and how you can increase it within your hotel, check out our blog post

See also:

Occupancy 

Average Daily Rate (ADR)

Revenue Management 

 

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