Revenue Per Available Room – RevPAR
RevPAR stands for Revenue Per Available Room. It’s a performance metric used in the industry to measure a property’s ability to fill its available rooms at an average rate.
How is it calculated? RevPAR is determined by taking the total room revenue and dividing it by the total number of available rooms. Alternatively, it can also be calculated by multiplying a hotel’s average daily room rate (ADR) by its occupancy rate.
Why is it important? RevPAR is crucial because it gives hoteliers an idea of both room rates and occupancy, combining these two vital indicators into one handy figure. This allows for a quick understanding of how well a property is filling its rooms, as well as how much it’s earning from each available room, regardless of whether it’s occupied or not.
In simpler terms, while occupancy rates tell us how full the hotel is, and ADR tells us about the average room pricing, RevPAR provides a comprehensive view, indicating how effectively we are managing both pricing and occupancy together.
We monitor metrics like RevPAR closely at StayCo to ensure that our strategies are effective and that we are maximising the potential of our properties. By understanding these metrics, we believe our unit owners can have a clearer picture of our operations and performance.