RevPAR (Revenue Per Available Room)

What Is RevPAR? Formula, Calculation and How to Improve It

RevPAR (Revenue Per Available Room) measures how much room revenue your hotel earns for every room it has available, whether or not that room is sold. Calculate it two ways: ADR multiplied by occupancy rate, or total room revenue divided by total available room nights. Both give the same figure.

What Is Revenue Per Available Room (RevPAR)?

Revenue Per Available Room (RevPAR) is a core hospitality metric that measures a property's ability to fill its rooms at a competitive average rate. It tells you how much room revenue you generate for each available room, counting both sold and unsold rooms.

Because RevPAR combines your Average Daily Rate and your Occupancy Rate, it reflects revenue efficiency more completely than either metric on its own. It sits at the center of any hotel revenue management strategy and can be measured across any period, from a single night to a full year.

What Is RevPAR in the Hotel Industry?

In the hotel industry, RevPAR is the common language for comparing revenue performance. Two properties can report identical occupancy yet very different RevPAR, because one sells its rooms at a higher rate. That is why owners, asset managers, and lenders lean on RevPAR to judge whether a property is pricing and filling its inventory well relative to its market.

How to Calculate RevPAR

You can calculate RevPAR using two different RevPAR formulas that produce the same result:

• Formula 1 (rate and occupancy): multiply your Average Daily Rate by your Occupancy Rate.
  
  • RevPAR = Average Daily Rate (ADR) × Occupancy Rate
• Formula 2 (revenue and inventory): divide your total room revenue by the total number of available room nights in the period.
  
  • RevPAR = Total Room Revenue ÷ Total Available Room Nights

The key detail in Formula 2 is available room nights, not just rooms. Multiply your room count by the number of nights in the period so the metric stays accurate for any timeframe.

RevPAR Calculation Examples

Take a 100-room hotel over a 30-day month. That gives 3,000 available room nights (100 rooms × 30 nights). The property sells 2,250 room nights (75% occupancy) at an ADR of $200, earning $450,000 in room revenue.

• Using Formula 1: $200 × 0.75 = $150 RevPAR
• Using Formula 2: $450,000 ÷ 3,000 = $150 RevPAR

Both methods return $150, which is the point: RevPAR is internally consistent whether you start from rate and occupancy or from revenue and inventory. Our RevPAR calculator applies the same logic, so you can input your numbers and get the figure instantly.

How and When to Calculate RevPAR

RevPAR is only useful when the period is defined. Calculate it monthly for operational reviews, weekly during peak or event periods, and year over year to strip out seasonality. Always compare like periods, since a resort's July RevPAR against its January RevPAR says more about the calendar than about performance. Reviewing RevPAR on a rolling basis helps you spot trends early and adjust pricing before demand shifts.

Why Is RevPAR Important?

RevPAR gives a balanced view of performance that neither occupancy nor ADR delivers alone.

• Accurate performance insight: it shows how effectively you fill rooms and price them at the same time.
• Smarter decisions: a sustained dip can signal new competition, seasonality, or a pricing problem, while a rise often confirms a campaign or strategy is working.
• Forecasting: tracking RevPAR helps you anticipate demand and plan rates ahead of it.
• Benchmarking: RevPAR is the standard for comparing your property against a competitive set.
• Balance: it forces the trade-off between rate and occupancy into a single number, so you do not chase one at the expense of the other.

What Is a Good RevPAR?

There is no universal good RevPAR, because it depends on your market, star rating, room count, and season. A luxury resort and a roadside motel can both be healthy at very different RevPAR levels. The reliable way to judge it is relative, using a RevPAR Index (also called RGI):

• RevPAR Index = (Your RevPAR ÷ Competitive Set RevPAR) × 100

A score of 100 means you are capturing your fair share of the market. Above 100 means you are outperforming your comp set, and below 100 means there is room to improve rate, occupancy, or both.

RevPAR vs ADR vs Occupancy Rate

RevPAR is built from the other two metrics, so they are best read together.

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If you want to compare rate and demand separately, use our ADR calculator and occupancy rate calculator alongside this one.

Limitations of RevPAR

RevPAR is powerful, but it does not tell the whole story:

• It ignores property size: a 40-room and a 400-room hotel can share the same RevPAR while generating very different total revenue.
• It ignores non-room revenue: food and beverage, spa, and events do not count. Use TRevPAR to capture total revenue per available room.
• It ignores profit: high RevPAR can still come with thin margins. Use GOPPAR to factor in operating costs.
• It ignores acquisition cost: revenue booked through high-commission channels costs more than direct revenue at the same rate.