What is RevPAR?
Updated
RevPAR, or revenue per available room, is a hotel’s room revenue divided by the number of rooms it had available to sell, whether or not they were sold.
Why does it matter to a small hotel?
RevPAR is the fairest single score for a small hotel because it cannot be flattered. A full house at a bargain rate and a half-empty house at a high rate can both look fine on their own, but RevPAR puts them on one scale. It is also the number to watch when you change a price: if RevPAR goes up, the change worked, whatever happened to occupancy or rate on their own. You can reach it two ways: room revenue ÷ rooms available, or ADR × occupancy. Both give the same answer.
A worked example
Take a 24-room hotel on the Welsh coast on an autumn Tuesday. It sells 16 rooms at an average of £110, so room revenue is £1,760. Rooms available are 24, so RevPAR is £1,760 ÷ 24 = £73.33. Check it the other way: occupancy is 16 ÷ 24 = 66.7%, and £110 × 16/24 is also £73.33. Now drop the price to £95 and sell 18 rooms: revenue is £1,710, RevPAR £71.25. The fuller house earned less per room available. If you want to see this for your own rooms, start a free trial of RatePulse and read it against your market.
Related terms
Questions people ask
What is a good RevPAR for a small UK hotel?
It depends on your town and season, so compare yourself with similar hotels nearby and with your own last year. A rising RevPAR against both is a better sign than any fixed target.
Is RevPAR the same as profit?
No. RevPAR counts room revenue only. It ignores commission, cleaning, staffing and breakfast costs, so a high RevPAR can still be an unprofitable night.
Do out-of-order rooms count as available?
Practice varies. Most hotels remove rooms that are genuinely unsellable, such as closed for refurbishment, from rooms available. Pick one rule and keep it the same month to month.