Revenue Per Available Room (RevPAR)
Key Takeaways
- RevPAR = ADR x Occupancy Rate (or Total Revenue / Total Available Nights)
- It accounts for both rate and occupancy, unlike ADR which only measures booked nights
- RevPAR is the industry standard for comparing performance across properties
- A higher RevPAR indicates better overall revenue optimization
How to Calculate RevPAR
Formula (Method 1):
RevPAR = ADR x Occupancy Rate
Formula (Method 2):
RevPAR = Total Room Revenue / Total Available Nights
Example:
A property with an ADR of $200 and a 65% occupancy rate:
RevPAR = $200 x 0.65 = $130
This means the property earns an average of $130 per available night, whether or not it was booked.
Why RevPAR Matters
RevPAR is considered the most holistic performance metric because it penalizes both low occupancy and low rates. A property can have a high ADR but low RevPAR if occupancy is poor, and vice versa.
| Scenario | ADR | Occupancy | RevPAR | Total Revenue (30 nights) |
|---|---|---|---|---|
| High rate, low occupancy | $300 | 40% | $120 | $3,600 |
| Balanced | $200 | 65% | $130 | $3,900 |
| Low rate, high occupancy | $150 | 90% | $135 | $4,050 |
This table shows why optimizing for RevPAR rather than ADR or occupancy alone leads to better revenue outcomes.
Frequently Asked Questions
A good RevPAR depends on your market and property type. It combines your ADR and occupancy rate, so it reflects your total revenue efficiency. Compare your RevPAR to similar properties in your market using AirROI's analytics tools.
ADR measures average revenue per booked night only. RevPAR accounts for all available nights, including unbooked ones. RevPAR = ADR x Occupancy Rate. A property with a $200 ADR and 60% occupancy has a RevPAR of $120.