RevPAR Calculator
Calculate Revenue Per Available Room (RevPAR) to understand your hotel's performance.
Understanding RevPAR (Revenue Per Available Room)
Revenue Per Available Room (RevPAR) is a crucial performance metric in the hospitality industry. It measures the average revenue earned from each available room, regardless of whether it was occupied or not. This metric is vital for hotels to assess their pricing, occupancy, and overall revenue generation efficiency. It helps in comparing performance over different periods, against competitors, and against budget.
RevPAR can be calculated using two primary methods, both yielding the same result. The first method involves dividing the total room revenue by the total number of available rooms. The second method involves multiplying the hotel's occupancy rate by its Average Daily Rate (ADR).
RevPAR = Total Room Revenue / Total Available Rooms
RevPAR = Occupancy Rate * Average Daily Rate (ADR)
Where:
Occupancy Rate = Total Occupied Rooms / Total Available Rooms
Average Daily Rate (ADR) = Total Room Revenue / Total Occupied Rooms
Why is RevPAR Important?
- Performance Measurement: It provides a single, consolidated view of revenue generation.
- Benchmarking: Allows hotels to compare their performance against industry averages and competitors.
- Strategic Decisions: Informs pricing strategies, marketing efforts, and operational adjustments.
- Investment Analysis: Crucial for investors evaluating a hotel's profitability and potential.
A rising RevPAR generally indicates a hotel is effectively managing its occupancy and room rates. Conversely, a declining RevPAR might signal issues with pricing, demand, or competitive pressures. It's important to analyze RevPAR in conjunction with other metrics like ADR and Occupancy Rate to gain a comprehensive understanding of hotel performance.