What is the difference between RevPAR and ADR?

ADR measures the average price of sold rooms, while RevPAR accounts for both price and occupancy. A hotel could have high ADR but low RevPAR if occupancy is poor.

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What is RevPAR?

Q: How do you calculate RevPAR?

RevPAR is calculated by dividing total room revenue by the total number of available rooms, or by multiplying the Average Daily Rate (ADR) by the occupancy rate.

Q: What is a good RevPAR?

A good RevPAR varies by market, property type, and season. Generally, a RevPAR that exceeds your competitive set's average indicates strong performance. Year-over-year growth in RevPAR is also a positive indicator.

Revenue Per Available Room (RevPAR) is a key performance metric in the hospitality industry that measures a hotel's ability to fill its available rooms at an average rate. It combines occupancy rate and average daily rate (ADR) into a single metric.

RevPAR Formula

RevPAR = Room Revenue ÷ Total Available Rooms OR RevPAR = ADR × Occupancy Rate

Why RevPAR Matters

Performance Benchmarking

Compare your hotel against competitors and market averages to identify opportunities.

Revenue Strategy

Balance pricing and occupancy decisions to maximize total room revenue.

Investment Analysis

Evaluate hotel performance for acquisition, renovation, or operational decisions.

Frequently Asked Questions

How do you calculate RevPAR?

Divide total room revenue by available rooms, or multiply ADR by occupancy rate.

What is a good RevPAR?

It varies by market. Outperforming your competitive set and showing year-over-year growth indicates strong performance.

RevPAR vs ADR: What's the difference?

ADR measures average room price; RevPAR factors in occupancy, giving a fuller picture of revenue performance.

Related Terms

ADR CRM PMS

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