Occupancy and Average Daily Rate (ADR) are metrics that provide a quick snapshot of hotel performance, but they don’t necessarily capture the entire story for hoteliers. RevPAR can provide a better understanding of how revenue is distributed across the property in a given timeframe. It also makes it possible to compare the performance across entire properties of different sizes.
How is RevPAR calculated?
RevPAR is the relationship between revenue from all rooms (or all of a certain type of room) and the total number of this kind of room in the entire property, whether occupied or not. So if you make £1000 total revenue from 15 rooms, your RevPAR would be £66.66.
RevPAR vs. ADR
It’s all about utilisation. RevPAR takes the whole hotel into account – contrast this with ADR, which only looks at the rooms you’ve sold. Example: in a 10-room hotel, your ADR is the same if you sell 1 room for £100 or 10 rooms for a total of £1000, whereas your RevPAR would be £10 in the first case and £100 in the latter one.
The ideal situation is when RevPAR = ADR, which means you have a full hotel!
RevPAR with Pace
Pace’s upcoming hotel dashboard visualises historic and forecasted RevPAR of your property so that you can make more informed pricing decisions.