Revenue per Available Room (RevPAR) is a key performance indicator in the hotel industry that measures the revenue generated per available room, regardless of whether the room was sold. It’s calculated by dividing total room revenue by the total number of available rooms during a specific period.

RevPAR can be calculated using two methods:

• Method 1: Divide total room revenue by the total number of available rooms.
  RevPAR = Total Room Revenue ÷ Total Rooms Available
• Method 2: Multiply the Average Daily Rate (ADR) by the occupancy rate.

RevPAR helps hoteliers assess how well they are filling rooms at an average rate. It combines both occupancy and pricing strategies, offering a comprehensive view of revenue performance. A higher RevPAR indicates better utilization of room inventory and can guide pricing and marketing decisions.

There are differing opinions on whether out-of-order rooms should be included when calculating RevPAR. Some hotels choose to exclude them from the total available rooms, while others include them, treating them as “sold” without revenue. It’s essential to be consistent in your approach to ensure accurate comparisons.

 To enhance RevPAR, consider:

• Optimising pricing strategies based on demand and market conditions.
• Increasing occupancy rates through targeted marketing and promotions.
• Upselling additional services like dining, spa, or parking to boost overall revenue.

Regularly monitoring and adjusting these factors can lead to improved RevPAR over time.