Revenue per Available Room (RevPAR) Calculator

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What Is Revenue per Available Room (RevPAR)?

Revenue per Available Room (RevPAR) is one of the most important hotel performance metrics in the hospitality industry. It measures the average income generated per available room, helping hoteliers assess how effectively they are filling rooms at the right price.

You can calculate RevPAR for a single night, week, month, or year. Tracking it regularly allows you to identify whether your hotel pricing strategy is working—whether your rates are driving occupancy or if they need to be adjusted.

For example, imagine your 20-room hotel has an 80% occupancy rate and an Average Daily Rate (ADR) of $100.

To calculate RevPAR, multiply ADR by occupancy rate:

$100 × 80% = $80.

Your RevPAR is $80, meaning your property earns $80 in room revenue per available room.

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RevPAR Formula: How & When to Calculate It

There are two primary ways to calculate RevPAR:

1. RevPAR = Average Daily Rate (ADR) × Occupancy Rate
2. RevPAR = Total Room Revenue ÷ Total Number of Available Rooms

Both methods yield the same result. For example, if your hotel earned $1,500 in total room revenue from 20 rooms, the calculation would be:

$1,500 ÷ 20 = $75

So your RevPAR is $75.

Calculating RevPAR daily, weekly, or monthly helps you monitor performance trends and spot opportunities for revenue growth.

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Why RevPAR Matters for Your Hotel

RevPAR is a core hotel KPI that combines two critical metrics: occupancy rate and average daily rate. Together, they provide a realistic snapshot of your revenue management strategy’s success.

Knowing your RevPAR allows you to:

• Evaluate how effectively your hotel fills rooms.
• Understand whether your pricing aligns with demand.
• Measure the impact of marketing and sales efforts.
• Track performance year over year to assess growth.

An increase in RevPAR over time indicates that your average room revenue or occupancy (or both) is rising—meaning your strategies are likely paying off.

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Limitations of RevPAR

While RevPAR is a powerful metric, it doesn’t tell the whole story of your hotel’s financial performance.

1. It Doesn’t Reflect Profitability

RevPAR shows how much revenue you’re generating per room, but it doesn’t factor in operating costs, marketing spend, or commission fees from OTAs. You could have a strong RevPAR but still low profit margins if your costs are too high.

2. It Ignores Additional Revenue Streams

RevPAR focuses only on room revenue. It doesn’t account for income from restaurants, bars, spas, or other services. For a broader view, you’ll need to combine RevPAR with other hotel KPIs like TRevPAR or GOPPAR.

3 Proven Ways to Improve Your Hotel’s RevPAR

Improving RevPAR means generating more revenue from each available room—either by increasing rates, boosting occupancy, or both. Here are three proven strategies:

1. Optimize Your Pricing Strategy

Adapting your rates based on market demand, competitor pricing, and seasonality can help maximize revenue.

Use dynamic pricing to adjust room rates in real time and stay competitive. If your prices are too high, occupancy will drop; too low, and you’ll reduce profitability.

Tools like Amenitiz’s Channel Manager allow you to update prices across all your OTA listings instantly, ensuring rate parity and saving time.

2. Implement Minimum Length of Stay Restrictions

During high-demand events—like local festivals or sports tournaments—set a minimum length of stay to maximize revenue.

For example, if a popular event runs Friday through Saturday, require guests to book at least three nights. This strategy helps fill shoulder nights (Thursday or Sunday) and boosts occupancy across multiple days.

3. Reduce Cancellation Rates

Frequent cancellations can seriously affect revenue. Try these tactics to minimize cancellations:

• Require a credit card deposit at booking.
• Offer non-refundable rates for discounted stays.
• Send automated reminder emails before check-in.
• Consider a slight overbooking strategy to offset expected cancellations.

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RevPAR vs. Other Hotel Performance Metrics

RevPAR is essential, but analyzing it alongside other hotel KPIs provides a complete picture of your business performance. Let’s look at how it compares to a few key metrics.

RevPAR vs. RGI (Revenue Generating Index)

The Revenue Generating Index (RGI) compares your hotel’s RevPAR to that of your competitive set (compset).

Formula: Your RevPAR ÷ Competitor’s RevPAR

If your RGI is above 1, your property outperforms competitors; below 1 means you’re lagging behind. Regularly tracking RGI helps evaluate market share and competitive positioning.

RevPAR vs. GOPPAR (Gross Operating Profit per Available Room)

GOPPAR accounts for total hotel profits after operating expenses.

Formula: Gross Operating Profit ÷ Total Rooms Available

Unlike RevPAR, GOPPAR includes all revenue streams (like food & beverage, spa, etc.) minus expenses, giving a clearer view of profitability.

RevPAR vs. TRevPAR (Total Revenue per Available Room)

TRevPAR goes beyond room revenue to include all income sources—restaurants, bars, spas, events, and more.

Formula: Total Hotel Revenue ÷ Total Rooms Available

This metric helps identify which revenue streams perform best, making it valuable for long-term growth and financial forecasting.

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Final Thoughts

In hospitality, providing an exceptional guest experience is vital—but understanding your financial performance metrics is just as crucial.

While full occupancy is great, it doesn’t always equal profitability. By calculating and analyzing your RevPAR, you gain powerful insights into your hotel’s performance and can develop smarter pricing, marketing, and revenue management strategies.

For an easier way to manage and grow your revenue, explore Amenitiz’s Revenue Management and Pricing Tools.

They help hoteliers like you automate rate adjustments, monitor key KPIs, and maximize profitability with confidence.