About RevPAR Calculator (Formula)
RevPAR stands for Revenue Per Available Room, and it’s a key performance metric in the hospitality industry. It helps hotels and other accommodation providers evaluate their financial performance based on the revenue generated from each available room.
The formula for calculating RevPAR is:
Where:
- ADR (Average Daily Rate) is the average income generated from each occupied room in a given period. It’s calculated by dividing the total room revenue by the number of rooms sold (occupied).
ADR= Total Room Revenue/Number of Occupied
- OR (Occupancy Rate) is the percentage of available rooms that are occupied during a specific time period. It’s calculated by dividing the number of occupied rooms by the total number of available rooms, then multiplying by 100 to get a percentage.
OR=(Number of Occupied Rooms/Total Number of Available Rooms)×100
When you multiply ADR by OR, you get the RevPAR, which represents the revenue generated per available room.
RevPAR is a crucial metric because it allows hotels to assess their performance regardless of the size of the property or the number of rooms. It provides a clear picture of how effectively a hotel is utilizing its available inventory. Higher RevPAR indicates better revenue generation for each available room, which is typically a positive sign of a hotel’s financial health.