RevPAR (Revenue Per Available Room) is a financial metric used in the hospitality industry to measure the revenue generated by a hotel’s rooms. It represents the average revenue generated per available room in a given period, and is used to gauge the overall financial performance of a hotel.
RevPAR can be calculated by multiplying the Average Daily Rate (ADR) by the Occupancy Rate.
Mathematically, it can be expressed as:
RevPAR = ADR x Occupancy Rate
For example, if a hotel has 100 rooms and an ADR of $100 and an occupancy rate of 80%, the RevPAR can be calculated as follows:
RevPAR = $100 x 80% = $80
So, the hotel would generate an average of $80 revenue per available room in that period.
Note that the occupancy rate is expressed as a percentage, so it needs to be converted to a decimal before being multiplied with the ADR.
