Hotel RevPAR: Meaning, Formula and Examples
What RevPAR means
Hotel RevPAR — revenue per available room — measures room revenue across all available rooms, including those that go unsold.
That last part is what makes it useful. Average daily rate (ADR) only looks at rooms you sold. Occupancy only looks at how many you sold. RevPAR combines the two: leaving rooms empty or selling them at a lower rate reduces room revenue per available room, all else equal.
Owners, lenders, and management companies use RevPAR to compare a hotel against its own prior periods, against a competitive set, and against other hotels in the same portfolio. Comparisons need consistent reporting definitions and context for each property’s market and room mix.
RevPAR formula
There are two ways to calculate RevPAR. With inputs from the same period and consistent room-count definitions, they give the same answer.
Method 1: room revenue over available room nights
RevPAR = Room revenue ÷ Available room nights
Method 2: ADR times occupancy
RevPAR = ADR × Occupancy rate
Use occupancy as a decimal in the second formula: 75% is 0.75, not 75.
The terms:
- Room revenue is revenue from room sales only, excluding taxes and non-room revenue.
- Available room nights is the sum of available rooms for each night in the period. If inventory is unchanged, multiply the number of rooms by the number of nights.
- ADR is room revenue divided by room nights sold.
- Occupancy is room nights sold divided by available room nights.
Method 1 is the one to use when you are pulling revenue straight from your property management system (PMS). Method 2 is quicker when you already report ADR and occupancy. Use unrounded inputs where possible; rounded ADR and occupancy can produce a small difference.
Hotel RevPAR example
A 120-room hotel sells 90 rooms on a Saturday night for $16,200 in room revenue. All 120 rooms are in its available inventory.
- ADR: $16,200 ÷ 90 = $180
- Occupancy: 90 ÷ 120 = 75%
- RevPAR, method 1: $16,200 ÷ 120 = $135
- RevPAR, method 2: $180 × 0.75 = $135
For a longer period, the denominator is room nights, not rooms. Over a 30-day month with unchanged inventory, the same hotel has 3,600 available room nights. Dividing monthly room revenue by 120 instead of 3,600 is a common RevPAR mistake, and it produces a figure 30 times too high.
RevPAR vs ADR
ADR tells you what you earned on the rooms you sold. RevPAR tells you what you earned per available room night. With consistent inputs and occupancy at or below 100%, RevPAR is at or below ADR; at full occupancy, they are equal.
The two can move in opposite directions. Take the same 120-room hotel with ADR rising by $30 and fewer rooms sold:
| Scenario | Rooms sold | ADR | Occupancy | Room revenue | RevPAR |
|---|---|---|---|---|---|
| Original rate | 90 | $180 | 75% | $16,200 | $135 |
| Rate up $30 | 72 | $210 | 60% | $15,120 | $126 |
ADR rose $30 and RevPAR fell $9. Discounting can also lift occupancy while lowering RevPAR if the extra room sales do not offset the lower rate. That is why most operators track the two together. Our ADR entry covers the rate side in more detail.
What counts as an available room
Rooms in the reporting inventory count whether sold or not. Follow the reporting standard used by your financial statements or benchmarking provider, and document how your PMS report maps to it. Do not change definitions just to improve the result.
- Out-of-order rooms. A temporary maintenance closure is not automatically a reduction in benchmark room supply. Renovations, extended closures, and permanent inventory changes can have different reporting treatments. Follow your provider’s rules rather than subtracting every room marked unavailable in the PMS.
- Complimentary and house-use rooms. Do not treat physical occupancy as paid room demand. STR’s demand definition excludes complimentary rooms; separate house use from paid rooms sold and follow the applicable reporting guidelines. Use the same rooms-sold definition for ADR and occupancy so the formulas reconcile.
- Packages. Allocate the room portion of a breakfast, parking, or other package to room revenue under your accounting policy. Do not count the entire package as room revenue if it includes non-room components.
A room that remains in the hotel’s reporting inventory does not disappear from the denominator because it was closed on Booking.com or Expedia. If a distribution problem prevents a sale, it can reduce room revenue and occupancy; it is not a reason to reduce available room nights. Sending the hotel’s rates and availability to connected channels is the part a channel manager handles.
RevPAR across a portfolio
For a group of properties, add up room revenue and available room nights first, then divide once. A simple average of each property’s RevPAR gives a small hotel the same weight as a large one.
Two properties over a 30-day month:
| Property | Rooms | Available room nights | Room revenue | RevPAR |
|---|---|---|---|---|
| Downtown hotel | 200 | 6,000 | $540,000 | $90 |
| Beach inn | 40 | 1,200 | $216,000 | $180 |
| Portfolio | 240 | 7,200 | $756,000 | $105 |
The simple average of $90 and $180 is $135. The portfolio actually earned $105 per available room night: $756,000 ÷ 7,200. The unweighted figure overstates it by $30, because the 40-room inn counts as much as the 200-room hotel.
The same rule applies to the inputs. Portfolio ADR is total room revenue over total room nights sold, and portfolio occupancy is total room nights sold over total available room nights. A property that joined mid-month contributes revenue and room nights only for the dates it was in the reporting portfolio.
For portfolios operating in multiple currencies, convert revenue to a common reporting currency using a documented exchange-rate method before adding it up. For like-for-like growth comparisons, keep the property set and reporting basis consistent; adding a higher-rate hotel can lift portfolio RevPAR without improving any existing hotel’s performance.
Condo, timeshare, and vacation-rental portfolios can use the same revenue-per-available-unit calculation, but their inventory definitions may differ. Document how owner-blocked nights are treated, and do not assume the result is directly comparable with a hotel benchmark.
What is a good RevPAR?
There is no single dollar figure that makes RevPAR good or bad. Compare the same season and day-of-week mix, a relevant competitive set, and your own budget. A resort and an economy roadside hotel can both perform well with very different RevPAR figures.
RevPAR Index helps put performance in context: an index above 100 means your hotel’s RevPAR is above the comparison group’s aggregate RevPAR. It does not establish profitability, and its usefulness depends on choosing a genuinely comparable group.
Why RevPAR isn’t profit
RevPAR measures room revenue, not what the hotel keeps. It leaves out two things.
Costs, including distribution. Two bookings that each generate $200 in recognized room revenue contribute the same amount to the RevPAR numerator. If one incurs an illustrative 18% OTA commission, that booking carries a $36 commission cost that gross RevPAR does not show. Direct bookings also incur costs, such as payment processing, booking technology, and marketing, so the difference in net proceeds depends on both bookings’ acquisition costs.
Revenue outside rooms. Food and beverage, parking, spa, and meeting space do not appear in RevPAR.
Three related metrics help fill those gaps:
| Metric | What it measures | Formula |
|---|---|---|
| TRevPAR (total revenue per available room) | All hotel operating revenue, not just rooms | Total operating revenue ÷ available room nights |
| Net RevPAR (NRevPAR) | Room revenue after defined acquisition and distribution costs | (Room revenue − specified acquisition and distribution costs) ÷ available room nights |
| GOPPAR (gross operating profit per available room) | Gross operating profit after operating expenses | Gross operating profit ÷ available room nights |
For Net RevPAR, state which costs you deduct—for example, commissions, transaction fees, and allocated acquisition costs—and keep that scope consistent. It is not net profit or GOPPAR. A hotel net rate is a rate used in a distribution agreement, not the same thing as the Net RevPAR metric.
Related terms
- RevPAR Index (RGI): your RevPAR divided by your competitive set’s aggregate RevPAR for the same period, times 100. Above 100 means your revenue per available room exceeds the comparison group’s; it is not your percentage share of all market revenue.
- Average daily rate (ADR): room revenue per room night sold.
- Occupancy: room nights sold as a share of available room nights.
ChannelRUSH is not a revenue management system (RMS). We distribute rates and availability to connected channels and don’t recommend rates.
The short version: divide room revenue by available room nights under a consistent reporting definition. For a portfolio, add up first and divide once.
Sources: CoStar / STR: RevPAR formulas and benchmarking; STR Benchmark glossary: ADR, room demand, and hotel reporting terminology.