What is RevPAR and how do you calculate it?
More than 30 years in hotel rooms division, from hostels to five-star chain hotels; focused on revenue management since 2009.
RevPAR (revenue per available room) is your room revenue divided by the number of rooms you had available. It equals occupancy times ADR, so it shows in one number how well you combined filling rooms with the price you got for them.
The formula
A worked example
Example figures. 1,020 ÷ 1,200 = 85%; €132,600 ÷ 1,020 = €130; €132,600 ÷ 1,200 = €110.50, the same as 85% × €130.
Why RevPAR and not occupancy or ADR alone
A higher occupancy at a much lower rate can leave you with less revenue, and a higher rate with empty rooms as well. RevPAR puts both in one number, which makes it the standard measure to compare months, years and hotels of different sizes.
Net RevPAR: after commission
RevPAR is usually calculated on room revenue before commission. If a large share of your bookings comes through Booking.com or Expedia, that hides what you keep. Net RevPAR uses room revenue after commission instead, so a month with more OTA bookings shows up as what it really earned.
RevView shows RevPAR incl. VAT, excl. VAT and net of commission on every page, against the same time last year and against your budget.
Questions
Is RevPAR calculated with or without VAT?
Usually on room revenue excluding VAT. What matters most is that you always use the same basis, also in your budget.
What is a good RevPAR?
There is no single good number: it depends on city, season and type of hotel. Compare against your own last year, your budget and the market.
What is the difference between RevPAR and ADR?
ADR divides revenue by rooms sold, RevPAR by rooms available. RevPAR also reflects the rooms that stayed empty.