Revenue per Available Room (RevPAR)

Choosing the right denominator

Divide room revenue by available room nights for the same dates. Ten rooms available for 30 nights provide 300 available room nights. Keep the currency and room-revenue basis consistent throughout, including the treatment of taxes, discounts and additional charges.

RevPAR also equals ADR multiplied by occupancy expressed as a decimal, provided all three measures use exactly the same revenue, sold nights and available nights. It is undefined when available nights are zero. With positive available nights and zero room revenue, RevPAR is zero.

A hypothetical example

A property has 300 available room nights in a month, sells 210 and records €25,200 in room revenue. RevPAR is €84, ADR is €120 and occupancy is 70%. The alternative calculation reaches the same result: €120 multiplied by 0.70 equals €84.

What the result tells you

A high average rate does not reveal how many rooms remained empty. High occupancy does not tell you what price those rooms achieved. RevPAR places both effects in one measure, helping you examine the room revenue produced by the capacity available to the business.

Compare equivalent periods and similar units. Changes in available nights, refurbishment or room mix can affect the result even when pricing policy alone has not changed. There is no universally good RevPAR for every property.

When it helps comparisons

RevPAR is useful when two periods have different combinations of rate and occupancy. Compare consistent inventory and comparable weekdays or seasons. To understand the wider financial result, also review other service revenue and expenses; RevPAR does not include them.

Revenue is not profit

RevPAR does not subtract payroll, housekeeping, energy or all booking acquisition expenses. Nor does it automatically include restaurant, transfer or other service revenue. Two properties with the same RevPAR can therefore have different profitability. A complete business assessment needs a separate view of expenses and other revenue streams.