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In this guide What is RevPAR?
RevPAR shows how much room revenue a hotel earns for every room night it could sell. Short for revenue per available room, it brings room rate and occupancy together in one measure. For an independent hotel, that makes it a useful first check on whether pricing and demand are working together.
You can calculate it in two ways: divide room revenue by available room nights, or multiply ADR by occupancy. This guide covers the RevPAR meaning, both formulas, two worked examples and a calculator, and shows what the result can and cannot tell you.
RevPAR meaning: what is RevPAR?
RevPAR is the room revenue earned per available room night over a set period. Imagine spreading that room revenue across every room night you could have sold, including the empty ones. The amount that lands on each is your RevPAR.
Unlike the average daily rate, which counts only sold rooms, RevPAR also reflects rooms that went unsold. Unlike the occupancy rate, it includes the rate achieved. That is why it is one of the most widely used top-line measures in hotel revenue management.
RevPAR is not profit. It excludes costs and income from food and drink, spa services, parking, meetings and other extras.
The RevPAR formula
There are two accepted ways to calculate RevPAR. With consistent inputs, they give the same answer.
Formula one: room revenue divided by available room nights
For more than one night, available room nights are sellable rooms multiplied by the nights in the period. 40 rooms over 30 nights give 1,200 available room nights.
Use room revenue excluding VAT and other taxes, and take out the breakfast or other non-room share of package rates. Treat OTA revenue according to the commercial model. For agency or “pay later” bookings, use the full room rate and record the commission as a distribution cost. For merchant or wholesale rates, where the OTA collects payment and passes on a net amount, use the net room revenue you actually receive. Do not mix the two treatments across periods. If you want the after-commission view, calculate a separately labelled net RevPAR.
Keep rooms that are out of order for a few days in available room nights. Whether to remove rooms closed for longer, such as during a refurbishment, depends on what the report is for. For an internal view of sellable inventory, you can exclude rooms that genuinely could not be sold, as long as you write the rule down and apply it in every period. Benchmarking providers such as STR apply their own rules to closures, so follow their method when you compare with a comp set. Practice also varies between systems, so check how your PMS reports it.
Formula two: ADR multiplied by occupancy
Convert the occupancy percentage to a decimal first: 75% becomes 0.75.
ADR and occupancy are inputs here, not the main subject. The ADR formula guide covers definitions and edge cases such as complimentary rooms.
How to calculate RevPAR
Choose a date range first: a night, week, month or trading period. For a single night, available room nights simply equal your sellable rooms.
Always compare on the same basis: a calendar month, a four-week period and an event weekend are not directly comparable.
If you work from spreadsheets, these inputs often come from different reports. RoomRaiser Business Intelligence brings room revenue, occupancy, ADR and RevPAR into one view for the period you choose. You can compare like with like without rebuilding the calculation each time.
RevPAR worked examples
These are illustrative calculations, not industry benchmarks or RoomRaiser customer results.
Worked example 1: a 30-day month
A 40-room independent hotel reviews one 30-day month: 40 × 30 = 1,200 available room nights, 780 room nights sold and €85,800 room revenue.
Check with formula two: ADR is €85,800 ÷ 780 = €110.00 and occupancy is 780 ÷ 1,200 = 65%.
Both routes match: the hotel earned €71.50 in room revenue for each available room night that month.
Worked example 2: rooms closed for refurbishment
A 24-room hotel had two rooms closed for the whole 30-day month. Its internal report follows a written rule that excludes rooms closed for the whole month, so it has 22 sellable rooms:
- Available room nights: 22 × 30 = 660
- Room nights sold: 495
- Room revenue: €54,450
RevPAR = €54,450 ÷ 660 = €82.50. Check: ADR = €54,450 ÷ 495 = €110.00, occupancy = 495 ÷ 660 = 75%, and €110.00 × 0.75 = €82.50.
If the two closed rooms stay in supply, available room nights are 24 × 30 = 720, occupancy is 495 ÷ 720 = 68.75% and RevPAR is €54,450 ÷ 720 = €75.63. Same hotel, same month, €6.87 difference, purely from the reporting rule. Only compare periods that follow the same rule, and expect a benchmarking provider to apply its own.
RevPAR calculator
Choose a method. From room revenue, enter room revenue, available room nights and room nights sold for the same period to see RevPAR together with ADR and occupancy. The other method multiplies ADR by occupancy. It opens with the figures from worked example 1. Choose the currency you report in; the calculator does not convert currencies.
RevPAR vs ADR
The link between ADR and RevPAR is simple: RevPAR is ADR multiplied by occupancy, so the two are best read together.
| Metric | What it measures | Which room nights | Best for |
|---|---|---|---|
| ADR | average room revenue per sold room night | sold only | tracking the rate achieved |
| RevPAR | room revenue per available room night | sold and unsold | the combined effect of rate and occupancy |
In standard overnight reporting, where each room can be sold once per night, occupancy cannot exceed 100%, so RevPAR cannot be higher than ADR. The two are equal only on a sold-out night. Day-use rooms resold for the same night are a specialist exception that can push occupancy above 100%.
How ADR and occupancy change RevPAR
RevPAR can rise through a stronger rate, higher occupancy or both, as long as the other driver does not fall by more. This sensitivity table isolates the arithmetic; it is not a set of price recommendations.
| ADR | 50% occupancy | 60% occupancy | 70% occupancy | 80% occupancy | 90% occupancy |
|---|---|---|---|---|---|
| €80 | €40 | €48 | €56 | €64 | €72 |
| €100 | €50 | €60 | €70 | €80 | €90 |
| €120 | €60 | €72 | €84 | €96 | €108 |
| €140 | €70 | €84 | €98 | €112 | €126 |
A €100 ADR at 70% occupancy produces the same €70 RevPAR as a €140 ADR at 50%. That does not make the outcomes equally good: per 100 available room nights, the first hotel sells and services 70 room nights, the second 50. Distribution costs, housekeeping, guest spend and cancellation risk may differ too.
Why higher occupancy is not always better
Two hotels in the same month:
- Hotel A: 90% occupancy × €80 ADR = €72 RevPAR
- Hotel B: 75% occupancy × €100 ADR = €75 RevPAR
Hotel B earns €3 more per available room night while servicing 15 fewer occupied room nights per 100 available room nights. This is not a case for raising rates everywhere. It shows why occupancy must always be read with the rate achieved.
How to interpret a change in RevPAR
RevPAR tells you that something changed, not why. Start with which driver moved:
| ADR | Occupancy | RevPAR | What to check |
|---|---|---|---|
| rises | stable | rises | whether demand is lasting or driven by one event |
| stable | rises | rises | which channels brought the extra volume, and at what cost |
| rises | falls | either way | whether the rate offsets the lost room nights; check booking pace |
| falls | rises | either way | whether the discount paid off after commission and servicing costs |
A simple weekly check
A flat RevPAR can hide a real shift in strategy, and that shift affects costs and future demand.
When RevPAR falls
A fall can point to weaker demand, lower achieved rates, more available supply or rooms sold too cheaply. It can also reflect planned work, an unusual comparison period or a decision to turn away business that would add little after costs.
When the cause is pricing, revenue management software can help. RoomRaiser’s RMS prepares rate recommendations from occupancy, booking pace and competitor rates. In semi-automatic mode you approve or edit each one within the minimum and maximum rates you set. The calendar shows the factors behind every recommended rate.
Comparing periods and properties
Review RevPAR by day of week, room type, segment and channel. Compare like with like: the same weekday pattern, season and reporting rules. In RoomRaiser BI, you can follow RevPAR alongside pickup and booking pace by channel, room type and period, and set it against budget and forecast. That shows whether a change came from rate, occupancy or a particular channel.
When comparing with other properties, choose a relevant competitive set and check that room revenue and available rooms are defined the same way. If you have comp-set data, the RevPAR index shows your share: your RevPAR ÷ comp-set RevPAR × 100. Above 100 means you earn more room revenue per available room than the group. Many small hotels do not buy comp-set RevPAR data. Monitoring competitor rates then shows only the price side, not their occupancy. There is no universal “good” RevPAR.
Investigate the drivers through your hotel dynamic pricing approach and the wider hotel revenue management process.
Common RevPAR calculation mistakes
- Dividing by rooms sold instead of available room nights. That gives ADR.
- Multiplying by 65 instead of 0.65.
- Using total hotel revenue instead of room revenue. That is closer to TRevPAR.
- Dividing one day’s revenue by a month’s capacity, or the reverse.
- Mixing revenue with and without VAT across periods.
- Treating closed or out-of-order rooms differently in the periods you compare.
Where RevPAR falls short
RevPAR measures top-line room revenue, not commercial health as a whole. It is also backward-looking: it tells you what happened, while pricing decisions for future dates rest on bookings on the books, booking pace and the forecast. It does not include:
- commission, payment fees or marketing costs;
- the cost of serving different bookings;
- profit;
- food, drink, spa, parking or event revenue;
- guest value beyond the room; or
- cancellation and no-show rates.
Two bookings can add the same room revenue but leave different amounts after costs. This matters most for hotels with a varied channel mix or strong non-room sales.
When that matters, add another measure:
- TRevPAR (total revenue per available room): total hotel revenue per available room night, including food, drink and other income.
- GOPPAR (gross operating profit per available room): gross operating profit per available room night.
- Net contribution: what a booking leaves after commission and other booking costs.
FAQ
Can RevPAR be higher than ADR?
Not in standard overnight reporting. Occupancy cannot exceed 100%, so RevPAR is at most equal to ADR, and only on a sold-out night. Day-use rooms resold for the same night are a rare exception.
Should RevPAR include VAT or commission?
Exclude VAT and other taxes and the non-room share of packages. For agency bookings, do not deduct OTA commission; for merchant or wholesale rates, use the net amount you actually receive. Most importantly, use the same rule in every period.
How do I calculate RevPAR for a month?
Multiply sellable rooms by the nights in the month, then divide the month's room revenue by that figure. 40 rooms over 30 nights give 1,200 available room nights.
Next step
RevPAR answers one focused question: how much room revenue did each available room night produce? Calculate it as room revenue divided by available room nights, or as ADR multiplied by occupancy. Reconcile the two, keep your reporting rules consistent and investigate the drivers behind any change. Add cost, channel and non-room measures when the decision goes beyond room revenue. For related terms, see the revenue management glossary. If you want an expert to examine the drivers in your own data, see what a hotel revenue audit covers.
