Definition
RevPAR is the room revenue a hotel generates for every room it has, whether or not that room was sold — calculated as ADR multiplied by occupancy, or total room revenue divided by total available rooms.
Also called: Revenue Per Available Room · Rev PAR
How it is calculated
- RevPAR = ADR × Occupancy
- RevPAR = Total Room Revenue ÷ Total Available Rooms (for the period)
In practice
Both formulas give the same answer. The reason RevPAR is the number to steer by is that it captures the trade-off between the two things a hotel can control: what it charges and how many rooms it sells. Occupancy alone tells you how full you are. ADR alone tells you what you charged for the rooms you did sell. Neither tells you whether the hotel is converting its inventory into revenue well.
That is why a hotel can raise its ADR and still go backwards — if the higher rate sells fewer rooms, RevPAR falls. It is equally why filling the hotel at a rate that does not cover its costs is, as we put it elsewhere, losing money efficiently.
There is no universal benchmark for a good RevPAR, because it varies enormously by city, segment and season. The two comparisons that mean something are against your own history for the same period last year, and against a basket of directly competing hotels — expressed as a RevPAR index.
A 100-room hotel on one night
- Rooms sold: 60 of 100 → occupancy 60%
- Average rate achieved: ₹4,000 → ADR ₹4,000
- RevPAR = ₹4,000 × 0.60 = ₹2,400
- Or: (60 × ₹4,000) ÷ 100 rooms = ₹2,40,000 ÷ 100 = ₹2,400
Why it matters to an owner
RevPAR is the single metric that stops a hotel optimising one number at the expense of the other. Every pricing decision, length-of-stay restriction and channel choice should be weighed by what it does to RevPAR, not by whether it fills rooms.
Frequently Asked Questions
No. Either can improve RevPAR or damage it, depending on what happens to the other. A rate rise that costs you too many room-nights lowers RevPAR, and so does an occupancy push bought with a deep discount. RevPAR is what resolves the question.
There is no universal figure — it varies hugely by city, segment and season. Compare against your own same-period performance last year, and against your competitive set as a RevPAR index.
No. RevPAR is a rooms metric. TRevPAR is the equivalent that includes F&B, banquets, spa and ancillary revenue, and GOPPAR brings profit rather than revenue into the picture.