Hotel Performance KPI Calculator
Calculate ADR, RevPAR, and Occupancy Rate instantly.
Understanding Essential Hotel Business Rates
In the hospitality industry, measuring performance goes beyond just looking at the bank balance. Revenue managers and hotel owners use specific Key Performance Indicators (KPIs) to evaluate the health of their business. This calculator helps you determine the most critical metrics: Occupancy, ADR, and RevPAR.
1. Occupancy Rate
The occupancy rate is the percentage of available rooms that were sold during a specific period. It is the most basic measure of demand. High occupancy is generally good, but if it comes at the cost of very low rates, it might not be profitable.
Formula: (Total Rooms Sold / Total Rooms Available) x 100
2. Average Daily Rate (ADR)
ADR measures the average price paid per room sold. This metric tells you how much revenue each occupied room is generating on average. It does not account for unsold rooms.
Formula: Total Room Revenue / Rooms Sold
3. Revenue Per Available Room (RevPAR)
RevPAR is widely considered the most important metric in hotel management. It combines both occupancy and price to show how much revenue is generated across all rooms in the inventory, whether they are occupied or not.
Formula: Total Room Revenue / Total Rooms Available (or ADR x Occupancy Rate)
Practical Example
Imagine a boutique hotel with 50 rooms. Last night, they sold 40 rooms and generated $6,000 in room revenue. Their expenses were $2,000.
- Occupancy: (40 / 50) = 80%
- ADR: $6,000 / 40 = $150.00
- RevPAR: $6,000 / 50 = $120.00
- GOPPAR: ($6,000 – $2,000) / 50 = $80.00
By using these rates, the manager can see that while the ADR is high, there is still 20% room for growth in inventory utilization.