Wondering what is RevPAR and whether your hotel’s number is any good? It is revenue per available room: room revenue spread across every room you could have sold, occupied or not. Here is how to calculate and read it.
If you are new to the numbers behind a hotel, these hospitality business basics give useful background.
| Item | Value |
|---|---|
| What RevPAR measures | Revenue per available room, occupied or not |
| Formula using revenue | Total room revenue ÷ total available rooms |
| Formula using rates | Average daily rate (ADR) × occupancy rate |
| Worked example | 80% occupancy and a $100 ADR give a $80 RevPAR |
| RevPAR index reading | A result above 100 means the hotel is outperforming the market |
These figures come from Mews and Smartness. Figures and definitions can change, so check the source before you rely on them.
What RevPAR actually measures
RevPAR stands for revenue per available room. Amadeus Hospitality describes it as the revenue generated per available room, whether or not the rooms are occupied.
That is what separates it from ADR. According to Smartness, ADR is the average price paid for sold rooms, while RevPAR spreads that revenue across all rooms.
Looking at occupancy or rate alone can mislead you. Smartness points out that you might see 100% occupancy because your prices are set too low, which limits the value you capture per night.
RevPAR also counts room revenue only. The same glossary says it excludes income from breakfast, spa services, parking or tours.
How to calculate RevPAR
You can reach the answer by two routes. Smartness says both formulas produce the same result, so use whichever suits the data you have.
- Revenue method: total room revenue ÷ total available rooms.
- Rate method: average daily rate (ADR) × occupancy rate.
Here is a worked example from Mews. A hotel with 100 rooms and 80% occupancy sells 80 rooms at $100 each, which is $8,000 in room revenue. Divide that by 100 rooms and RevPAR is $80, the same answer you get from $100 × 80%.
Notice that RevPAR in that example sits below ADR. Smartness explains that RevPAR is always lower than ADR unless occupancy is 100%, and a very wide gap can be a sign that occupancy is relatively low.
For a closer look at the occupancy input, read about the hotel occupancy rate.
Mews suggests a few habits to keep the calculation consistent:
- Choose a consistent time frame (daily, weekly, monthly, quarterly or annually) and stick with it so results stay comparable over time.
- Include all room revenue, such as rates, additional charges and fees, but exclude food and beverage and other amenities.
- Count all rooms available during the period, excluding any that are out of service.
How to judge whether a RevPAR is good
There is no single good number. Mews notes that a strong RevPAR for a budget property could be weak for a luxury one.
The useful benchmark is the comp set, meaning the group of similar hotels you compete with. Mews says a good RevPAR means a hotel outperforms the average for its comp set, which signals strong demand and effective pricing.
Smartness describes two practical comparisons:
- Historical: compare current performance against the same period last year.
- Competitive set: compare against a small group of direct competitors in your area.
The RevPAR index turns the comp set comparison into one figure: your RevPAR divided by market RevPAR, times 100. In the Mews example, a comp set of 20 hotels averages $60 and a hotel earning $80 scores 133. Above 100 means the hotel is outperforming the market; below 100 means competitors are ahead.
A falling number is not always a failure. Smartness says a drop may simply reflect a market-wide downturn, so the comparison with competitors matters.
What RevPAR leaves out
RevPAR says nothing about cost. Amadeus Hospitality notes that it does not take into account costs per occupied room, so it cannot serve as a key measure of profitability.
It also ignores additional income from other departments such as catering, parking or the spa, according to the same source. Several related metrics fill those gaps:
| Metric | What it adds |
|---|---|
| TrevPAR | Total revenue per available room, across outlets like the spa, the pool and restaurants |
| GOPPAR | Gross operating profit per available room |
| ARPAR | Adjusted revenue per available room, which accounts for revenue and costs per occupied room |
The gap between revenue and profit can be real. Smartness says a strong RevPAR can sit alongside a weaker GopPAR when booking acquisition costs, such as OTA commissions, and operating expenses are high.
If a hotel management company runs a property, it is reasonable to ask which of these measures appear in its reports rather than RevPAR alone.
How hotels try to lift RevPAR
Smartness says improving RevPAR generally involves two levers: price and volume. Common approaches include:
- Understand demand patterns. Amadeus Hospitality says this lets hotels set strategic pricing that can charge more than competitors and still fill rooms.
- Use dynamic pricing. Smartness says these tools analyze signals like booking pace, market demand and local events to recommend rate adjustments.
- Apply minimum-stay rules. Smartness says they can reduce calendar fragmentation and limit unsold gap nights during high-demand periods.
Frequently asked questions
Is RevPAR the same as ADR?
Show answer
No. ADR is the average price paid for sold rooms, while RevPAR spreads room revenue across all available rooms, as Smartness explains.
Does RevPAR include food and beverage?
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No. Mews advises including all room revenue while excluding revenue from food and beverage or other amenities.
Does RevPAR show profit?
Show answer
No. Amadeus Hospitality says it does not account for costs per occupied room, so metrics such as GOPPAR are used to look at profit.
What time frame should you use?
Show answer
Any of daily, weekly, monthly, quarterly or annually works, provided you stay consistent. Mews says this keeps results comparable over time.
