Performance & revenue
RevPAR
Also written: revenue per available room
What RevPAR means
Revenue Per Available Room measures a hotel's ability to generate revenue from its total room inventory over a specific period. Unlike Average Daily Rate, it accounts for unsold rooms, offering a single metric that balances both occupancy percentage and room pricing performance.
Formula
RevPAR = ADR × Occupancy Rate
How it is used
Revenue managers use RevPAR to evaluate overall top-line room yield and compare performance against comp sets using the RevPAR Index (RGI). It drives pricing adjustments, inventory allocation, and channel management decisions. Operators track daily, monthly, and annual RevPAR fluctuations to assess market demand capture. However, because it ignores operational costs, labor, and non-room revenue streams like food and beverage, executives increasingly pair it with GOPPAR and TRevPAR to evaluate true profitability.
Worked example
A 200-room hotel generates $30,000 in total room revenue on a Tuesday night, selling 150 rooms at an ADR of $200 with an 75% occupancy rate. RevPAR can be calculated as $30,000 divided by 200 available rooms, or $200 ADR multiplied by 0.75 occupancy, resulting in a RevPAR of $150.
Common mistake
Focusing solely on boosting RevPAR can hide declining profitability if high occupancy drives up operational expenses and distribution costs.
Related terms
Work it out
RevPAR Calculator — Work out revenue per available room from occupancy and rate — or from total revenue.
Break-Even Occupancy Calculator — The occupancy you need before the hotel makes a penny.
Rate Drop Calculator — How much extra occupancy a discount has to buy before it is worth doing.
RevPAR in our reporting
Recent stories where this term does real work.