RevPAR falls when rates fall, occupancy falls, or both.
Hospitality glossary · Revenue metrics
Revenue per Available Room (RevPAR)
Definition
Revenue per Available Room (RevPAR) measures accommodation revenue generated per available room or unit night, whether or not that inventory was occupied.
In plain English
What does RevPAR mean?
RevPAR combines pricing and occupancy into one utilization-oriented revenue metric. It asks how much accommodation revenue each available night generated on average.
FormulaRevPAR = accommodation revenue ÷ available room or unit nights; equivalently, RevPAR = ADR × occupancy rate
When using ADR × occupancy, occupancy should be expressed as a decimal. For example, 75% occupancy is 0.75.
Worked example
If ADR is $200 and occupancy is 75%, RevPAR = $200 × 0.75 = $150. The same result would come from $4,500 accommodation revenue across 30 available nights.
Operational meaning
Why it matters in hospitality operations.
RevPAR gives more context than ADR alone because unsold availability affects the result. It is still a revenue metric, not a profit metric, and does not account for operating costs.
See operational finance in HOS →How to interpret it
Keep the metric or concept attached to its operating context.
Definitions are useful when the underlying data and workflow boundaries stay consistent.
Blocked or unavailable inventory can affect the denominator depending on the reporting convention used.
A portfolio-level RevPAR can hide large differences between properties, so property-level review remains useful.
RevPAR does not deduct cleaning, channel fees, wages, maintenance, utilities, or other costs.
Common mistakes
What not to assume.
01
Multiplying ADR by occupancy expressed as 75 instead of 0.75.
02
Assuming RevPAR measures profit.
03
Changing the definition of available inventory between periods.