REVPAR stands for Revenue Per Available Room. It is a key performance metric used in the hospitality industry to measure the revenue generated by each available room in a hotel or lodging facility.
REVPAR is calculated by multiplying the ADR (Average Daily Rate) by the occupancy rate. The resulting figure represents the revenue generated per available room during a given period.
For example, if a hotel has 100 rooms, generates $10,000 in room revenue in a given day, and 80 of those rooms are occupied, the ADR would be $125 and the occupancy rate would be 80%. The REVPAR would be calculated as follows:
REVPAR = $125 (ADR) x 80% (occupancy rate) = $100
The REVPAR metric provides important insight into a hotel's revenue performance, as it takes into account both the rate at which rooms are sold and the percentage of available rooms that are occupied. A higher REVPAR indicates that a hotel is generating more revenue per available room, which can help to increase profitability.
REVPAR is commonly used by hotel operators and investors to assess the performance of a property relative to its competitors and to track trends in the market. It is also used in conjunction with other metrics, such as occupancy rate and ADR, to evaluate the overall financial health of a hotel.
