Hotel RevPAR: definition, formula and free calculator

Two ways to calculate RevPAR

The direct method is room revenue divided by rooms available. The cross-check is average daily rate (ADR) multiplied by occupancy as a decimal. They agree only when revenue, sold rooms and available rooms cover exactly the same period and reporting scope.

ADR divides room revenue by rooms sold. Occupancy divides rooms sold by rooms available. With no rooms sold, ADR is undefined; RevPAR can be zero when room revenue is zero and available-room supply is positive.

Illustrative night: 50 rooms, 38 sold, €5,700 room revenue

Actual occupancy is 38 ÷ 50 = 76%. ADR is €5,700 ÷ 38 = €150. RevPAR is €5,700 ÷ 50 = €114; the cross-check is €150 × 0.76 = €114. The figures reconcile without mixing rooms with restaurant revenue.

Define available-room supply before comparing results

For one night, use available rooms within the stated reporting scope. Across several nights, add available room nights rather than counting the physical rooms once. Operationally usable capacity, rooms still for sale and the metric denominator are different figures.

Check with Finance and the PMS how complimentary rooms, rooms used internally and out-of-order rooms are treated. Complimentary or internal occupancy may generate no room revenue. If occupancy includes those rooms but ADR counts only paid rooms, ADR × occupancy will not reconcile to RevPAR: align the sold-room denominator. An out-of-order room may leave sellable supply while an external benchmark applies a different denominator convention; document both when they differ.

Keep revenue to the room component, after the rebates included in your reporting, on the same tax basis. A room-and-breakfast package needs a consistent allocation. TRevPAR uses total property revenue; it is not another term for RevPAR.

What is a good RevPAR?

There is no universal threshold. €114 may be excellent in a soft week and disappointing on a trade-fair night. Compare like-for-like stay dates with budget, prior-year actuals and booking pace at the same lead time. If you have competitor-set data, first check that the set and reporting definitions are meaningful for your property.

RevPAR omits acquisition cost, operating profit and restaurant revenue. It flags a movement; customer mix, the calendar, ADR and channels help explain it.

Use booking pickup to interpret future dates

ADR can rise while RevPAR falls

Consider two fictional nights with 50 available rooms. Night A sells 40 at €150 ADR: €6,000 revenue and €120 RevPAR. Night B sells 35 at €165 ADR: the rate rises 10%, but revenue falls to €5,775 and RevPAR to €115.50. Five lost room nights outweigh the gain in average rate.

That does not prove the rate rise caused the volume loss; demand may have changed. It does show why price and occupancy must be read together.

NetRevPAR: after acquisition cost, not net profit

NetRevPAR is a complementary measure covered by HSMAI; it is not explicitly defined as a separate metric in the current LuxOps handbook. Here it deducts defined acquisition costs — such as commission, transaction fees and attributable marketing spend — from room revenue before dividing by available rooms. Publish the cost scope and do not deduct a commission twice when it is already withheld from a net settlement.

With a hypothetical €570 acquisition cost in the first example, indicative NetRevPAR is (€5,700 − €570) ÷ 50 = €102.60. Housekeeping, payroll and energy have not been deducted; this is not profit.

Break down direct and OTA acquisition costs

Checks before a dashboard goes out

If the two RevPAR methods disagree, look for a scope mismatch before drawing a commercial conclusion.

• Room revenue divided by rooms sold is ADR, not RevPAR.
• Mixing tax bases or incomplete available-room nights distorts comparisons.
• Unallocated package revenue can inflate the room numerator.
• Forecast occupancy must not be reported as an actual.