What is RevPAR?
It is the metric that sums up in a single number whether a property is filling and at what price. That is why it is the one used to compare hotels against each other and to track how a single hotel moves year on year.
How it is calculated
There are two routes and they end up in the same place:
- From revenue: room revenue ÷ available rooms.
- From components: occupancy × ADR.
A 30-room hotel that took €108,500 in room revenue in July has 31 × 30 = 930 available rooms. Its RevPAR is 108,500 ÷ 930 = €116.67.
What it is for
- Comparing without fooling yourself: occupancy on its own can be dressed up by dropping the rate, and ADR on its own by selling little and expensive. RevPAR punishes both.
- Measuring the effect of a decision: if you raise rates and RevPAR falls, the increase cost you more occupancy than it was worth.
- Comparing against the market: it is the indicator used by industry reports and destination benchmarks.
What is the difference between ADR and RevPAR
ADR only looks at the rooms you sold; RevPAR looks at all the ones you had. A hotel running 58% occupancy at an ADR of €165 has a RevPAR of €95.70, worse than one at 82% and an ADR of €141, which reaches €115.62 — even though its average rate is lower.
What RevPAR does not tell you
That it does not count what the guest spends outside the room. A hotel with a spa and a restaurant can have a mediocre RevPAR and an excellent set of accounts; that is what TrevPAR and GOPPAR are for. And that it does not distinguish between channels: €116 with 70% coming through OTAs is not worth the same as €116 with 40%.