RevPAR
RevPAR, or revenue per available room, is an important metric relevant to the hotel industry. Often it is utilized as a primary statistic indicating the overall financial performance of a property.
Note that RevPAR numbers represent a measure of performance in terms relative to a property's past results, and especially in comparison to competitors within a custom defined market, trading area, or DMA. Also, comparisons are usually best considered between hotels of the same type, or with target customers. (e.g. Full Service, Luxury, Extended Stay, Economy)
A few syndicated data companies compile RevPAR information across markets via voluntary survey, and provide compiled blinded information back to the industry.
Other Caveats:
- Successful RevPAR numbers differ from market to market based on demand, cost of living, and other factors.
- Best compared across like time periods. For example, it is proper to compare RevPAR on a Friday only versus other Fridays.
- Best compared across similar seasonal time periods. For example, comparing results from the Christmas week with the same a year previous is more credible than with a non-holiday week.
Calculation
- RevPAR is revenue per available room,
- Rooms Revenue is the revenue generated by rooms sales
- Rooms Available is the number of rooms available for sale in the time period
An often used short cut to estimate RevPAR is to multiply Occupancy % times Average Daily Rate (ADR)
- So, Revpar (estimated) = Occ% * ADR
- REVPAR GURU or REVPARGURU is a company based in Miami Florida which provides a software that increases REVPAR