RevPAR Calculator
Revenue Per Available Room (RevPAR) is the hotel industry's most important performance metric. It combines pricing power (ADR) with demand (occupancy) into one number that reveals your true revenue efficiency.
RevPAR Calculator
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Formula
RevPAR = Total Room Revenue ÷ Available RoomsAlternative Formula:
RevPAR = ADR × Occupancy RateHow to Improve
- Balance rate and occupancy—neither maximizing ADR nor occupancy alone optimizes RevPAR
- Use demand forecasting to set optimal prices for each night rather than fixed seasonal rates
- Minimize deep discounts that erode ADR; instead, add value through packages
- Optimize your channel mix—direct bookings have lower acquisition costs than OTA bookings
- Invest in a revenue management system (RMS) for data-driven pricing decisions
Industry Benchmarks
| Hotel Type | Low | Average | High |
|---|---|---|---|
| Budget | $30.00 | $50.00 | $70.00 |
| Midscale | $60.00 | $90.00 | $120.00 |
| Upscale | $100.00 | $150.00 | $200.00 |
| Luxury | $200.00 | $350.00 | $500.00 |
What is RevPAR (Revenue Per Available Room)?
RevPAR—Revenue Per Available Room—is the hotel industry's gold standard for measuring revenue performance. Unlike ADR, which only looks at sold rooms, RevPAR considers your entire inventory. It answers the critical question: 'How much revenue are we generating from every room we have, whether sold or not?'
RevPAR elegantly combines two fundamental metrics: your pricing power (ADR) and your ability to generate demand (occupancy). This makes it far more useful than either metric alone. A hotel can have a sky-high ADR but terrible RevPAR if rooms sit empty, or impressive occupancy but weak RevPAR if rates are too low.
Global hotel brands, STR (the industry benchmarking authority), investors, and lenders all rely on RevPAR to evaluate hotel performance. When you hear about hotel industry trends or compare properties, RevPAR is typically the metric being discussed.
How to Calculate RevPAR (Two Methods)
There are two equivalent ways to calculate RevPAR. The first method divides total room revenue by available rooms (not sold rooms). The second multiplies ADR by occupancy rate. Both formulas produce the same result.
The first method is useful when you have raw revenue data. The second method helps you understand the components driving your RevPAR—you can see whether changes come from rate (ADR) or occupancy shifts.
Worked Example (Both Methods)
- 1.Your hotel has 100 rooms available
- 2.Last night, 80 rooms were sold at an average of $125 (ADR)
- 3.Total room revenue: 80 × $125 = $10,000
- 4.Method 1: RevPAR = $10,000 ÷ 100 rooms = $100
- 5.Method 2: RevPAR = $125 ADR × 80% Occupancy = $100
Your RevPAR is $100.00 per available room
Why RevPAR is the Most Important Hotel Metric
RevPAR matters because it captures the fundamental trade-off in hotel revenue management. You can always fill rooms by dropping rates, but that's not smart business. You can charge premium rates, but empty rooms generate zero revenue. RevPAR shows how well you're balancing this equation.
Investors and hotel owners care deeply about RevPAR because it directly correlates with property value. Hotels are often valued as a multiple of RevPAR. A consistent 10% improvement in RevPAR can significantly increase what your property is worth.
RevPAR also enables meaningful comparisons across different properties. A 50-room boutique hotel and a 500-room convention center might have vastly different revenues, but their RevPAR numbers are directly comparable.
What RevPAR Doesn't Tell You
- •RevPAR ignores distribution costs—two hotels with the same RevPAR may have very different net revenues if one relies heavily on OTAs
- •It excludes non-room revenue like food & beverage, spa, parking, and meetings. TRevPAR addresses this
- •RevPAR says nothing about profitability—a hotel might have great RevPAR but poor cost management
- •It doesn't account for market mix—group bookings at lower rates may drag down RevPAR while filling rooms that would otherwise be empty
- •RevPAR can't distinguish between transient, group, and contract business, which have different value characteristics
Related Hotel Metrics
ADR (Average Daily Rate)
Your average revenue per sold room. RevPAR = ADR × Occupancy, so ADR is a component of RevPAR.
Occupancy Rate
Percentage of rooms sold. The other component of RevPAR. High occupancy with low ADR can still mean weak RevPAR.
RevPAR Index (RGI)
Compares your RevPAR to your competitive set. An index of 100 means you're getting your fair share; above 100 means you're outperforming.
TRevPAR (Total Revenue Per Available Room)
Includes all revenue sources, not just rooms. Shows the full revenue picture for full-service properties.
GOPPAR
Gross Operating Profit Per Available Room accounts for costs, showing true profitability rather than just revenue.
Frequently Asked Questions
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