Calculate revenue potential

What is Revenue per Available Room (RevPAR)?

RevPAR spreads your room revenue across every room you own, not just the ones you sold.

That single change makes it much harder to fool than ADR. An empty room still sits in the divide. It cannot hide, and neither can a quiet Tuesday.

RevPAR covers rooms only. Your restaurant, bar and spa belong in TRevPAR.

RevPAR formula

Total room revenue ÷ Available room nights

A 40-room hotel over a 30-day month has 1,200 available room nights. Room revenue came in at $109,200.

$109,200 ÷ 1,200 = $91

There is a second route to the same answer:

ADR × Occupancy

$140 × 65% = $91

Use whichever pair of numbers you already have in front of you. They agree.

How to calculate your property's monthly and yearly RevPAR

Count your available room nights for the period, then divide your room revenue by that figure. For a 40-room hotel, a month is roughly 1,200 room nights and a year is 14,600.

Take rooms out of your available count when they were genuinely unsellable, such as a floor under renovation. Leaving them in makes a good month look like a bad one.

Yearly RevPAR is the number your owner or lender will ask for, because it survives seasonality. Monthly RevPAR is the number you actually manage with, because it still moves when you change something.

Why is RevPAR important?

RevPAR is the number that tells you whether your pricing and your selling are working together. On its own it is a score. Read against occupancy, it becomes an instruction.

RevPAR is up because your ADR is up. This is the healthy kind of growth. You earned more without cleaning more rooms, paying more commission or asking more of your team. Find out what caused it and protect it.

RevPAR is up because your occupancy is up. Good, but check your costs before you celebrate. More rooms sold means more housekeeping, more amenities and more commission. Run GOPPAR. Volume growth often arrives with a thinner margin attached.

Your occupancy climbed but RevPAR stayed flat. You bought those bookings with discounts. You are busier and no richer. Pull your cheapest rate off your strongest nights first, and see whether they still fill.

This is why owners and investors ask for RevPAR rather than ADR. Two hotels can charge the same and earn very differently. RevPAR shows which one sold.

4 strategies to improve your property's RevPAR

RevPAR moves when either half of it moves. These four work on both.

1. Fix your weakest nights, not your best ones

Your sold-out Saturday cannot improve. Your 30% Tuesday can. Look at your week, find the two days carrying the least revenue, and put your effort there. That is where RevPAR is hiding.

2. Stop discounting the nights that were always going to sell

A promotion that runs across every date discounts your best dates for no reason. Set date rules on every offer so your peak nights sell at peak rates.

3. Turn two nights into three

A guest who extends costs you nothing to acquire. Minimum stay offers, third-night discounts and a well-timed message before arrival all fill room nights you have already paid to reach.

4. Push every rate change to every channel at once

A rate you raised this morning that reaches Booking.com tomorrow is a rate you sold at yesterday's price. The gap between your decision and the market is pure lost RevPAR, and nobody ever sees it on a report.