In the vacation rental and hotel industries, RevPAR offers insights into occupancy rates and revenue generation, helping property managers make data-driven decisions to optimize profitability.

How to Calculate RevPAR

The formula for RevPAR is:

RevPAR = Total Room Revenue / Total Available Rooms

Alternatively, RevPAR can also be calculated as:

RevPAR = Average Daily Rate (ADR) × Occupancy Rate

This metric reflects how well available rooms generate revenue, combining pricing and occupancy performance into a single figure.

Origin of the Acronym RevPAR

RevPAR originated in the late 1980s and 1990s as a standardized metric for evaluating hotel performance. It became a cornerstone for revenue management, enabling hoteliers to benchmark their properties against competitors and track financial success.

Synonyms and Antonyms

Synonyms

• Room Revenue Efficiency
• Revenue Per Available Room Night
• ADR-Occupancy Metric

Antonyms

• Empty Room Revenue
• Unutilized Inventory

How RevPAR Is Used in the Hospitality Industry

RevPAR is a critical performance metric for analyzing a property’s revenue efficiency. It aids in pricing strategy development, assessing market competitiveness, and improving revenue streams. Here are practical applications:

• Revenue Management: Adjust room rates based on demand and occupancy to maximize RevPAR.
• Market Benchmarking: Compare your RevPAR to competitors to identify growth opportunities.
• Operational Insights: Analyze room revenue generation to optimize staffing and resource allocation.

Examples of Calculating RevPAR

Example 1: Urban Boutique Hotel

A hotel with 50 available rooms generates $5,000 in total room revenue for one day. The RevPAR is:

$5,000 ÷ 50 = $100

Example 2: Beachfront Vacation Rental

A vacation rental property has 10 units available and earns $2,000 in revenue over a day. The RevPAR calculation is:

$2,000 ÷ 10 = $200

Using ADR and Occupancy

If a hotel has an ADR of $150 and an occupancy rate of 80%, the RevPAR is:

$150 × 0.80 = $120

Related Terms

• Average Daily Rate (ADR): The average revenue earned per room sold.
• Occupancy Rate: The percentage of available rooms occupied during a specific period.
• TrevPAR (Total Revenue Per Available Room): Includes all revenue streams, such as food, beverages, and spa services.
• GOPPAR (Gross Operating Profit Per Available Room): Accounts for operating costs alongside revenue to measure profitability.