Revenue per Available Room (RevPAR)
Revenue per Available Room or RevPAR is one of the main hotel revenue management KPIs that shows the amount of revenue generated by one room, whether booked or not. To calculate it, either divide your total room revenue by the total number of available rooms or multiply the average daily rate (ADR is the average rental revenue per occupied room at a given time) by the occupancy rate (the percentage of occupied rooms in a property at a given time).
RevPAR is similar to ADR, but, taking the unsold room into account, gives a more accurate performance picture. Hoteliers strive for increasing their RevPAR since it reflects both the pricing for rooms and the ability to fill them.
However, similar to ADR, RevPAR doesn’t include additional revenue from other sources, so it only shows the inventory performance. It also doesn’t take into account any operational costs and other expenses and can’t be used to measure profitability. Besides, the calculation is on a per-room basis, so sometimes large hotels have a smaller RevPAR, but still generate higher total revenue.