What is RevPAR ? | Hotel Marketing

What is RevPAR ?

No matter where you are on your hotel revenue journey, Bezla can help you go further.

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What is RevPAR?

We all know that the core business of the hotel industry is selling rooms. How can you tell if you are doing well in your core business? RevPAR, which stands for revenue per available room, tells you how much money you are making from each room per night based on how many rooms are occupied and how much you are charging for them.

RevPAR is the gold-standard metric in hotel revenue management and is used across all hotels worldwide. If you have not been using RevPAR at your hotel, you should start doing it today.

Add all of your total room revenue for the night and divide it by your total number of available rooms, whether or not they are occupied. Let’s say that in a 250-room hotel, the total room revenue for the night is $20,000. The RevPAR is $80.

Other hotels in your local market could have a RevPAR of $80, but they could be larger hotels with more rooms or smaller hotels with fewer rooms. Hotels can have the same RevPAR, but they are performing very differently depending on their actual number of available rooms. Thus, use RevPAR along with other revenue management metrics such as your occupancy rate and average daily room rate to get a fuller picture of your performance against the competition.

The beauty of RevPAR is that it is purely based on your room revenue. By excluding value-added features like your bar or restaurant revenue, you can focus on your core business. That essentially enables you to decide if you need to adjust your nightly rate or increase your occupancy to get the right amount of revenue for your hotel. If you get your core business right, the success of your other value-added features will follow.