RevPAR (Revenue per Available Room)
RevPAR (Revenue per Available Room) is the single most-watched KPI in hotel performance. It combines rate and occupancy into one number, measuring how much room revenue a property generates for every room it has available — whether that room was sold or not.
Formula
There are two equivalent ways to calculate RevPAR:
RevPAR = Room Revenue / Number of Available RoomsRevPAR = ADR × Occupancy Rate
Example
A 200-room hotel earns $24,000 in room revenue on a given night with 150 rooms sold.
- ADR = $24,000 / 150 = $160
- Occupancy = 150 / 200 = 75%
- RevPAR = $24,000 / 200 = $120 (or $160 × 0.75)
Why RevPAR matters
Unlike ADR, which only measures rate, RevPAR captures the trade-off between rate and volume. A hotel can push rates up and watch ADR rise, but if occupancy falls faster, RevPAR drops. Revenue managers use RevPAR as the north-star metric when setting pricing and distribution strategy.
Limitations
RevPAR only covers rooms revenue. It ignores F&B, spa, parking, and other ancillary income — which is why many operators also track TRevPAR (Total Revenue per Available Room) and GOPPAR (Gross Operating Profit per Available Room).