Financial
What is RevPAR (Revenue Per Available Room)?
A key hospitality metric calculated by multiplying average daily rate (ADR) by occupancy rate, representing revenue per available accommodation unit.
Understanding RevPAR (Revenue Per Available Room)
RevPAR, or Revenue Per Available Room (or unit), is a critical performance metric in the hospitality industry. It's calculated by multiplying the Average Daily Rate (ADR) by the Occupancy Rate, or by dividing total room revenue by the number of available rooms.
RevPAR provides a single metric that combines both pricing and occupancy performance, making it useful for comparing properties and tracking performance over time. For outdoor hospitality properties, RevPAR helps owners understand revenue efficiency and optimize pricing strategies.
For example, if a glamping resort has an ADR of $200 and 75% occupancy, the RevPAR would be $150 ($200 × 0.75). This means the property generates $150 per available unit, regardless of whether it's occupied.
Sage Outdoor Advisory includes RevPAR analysis and benchmarking in our feasibility studies, helping clients understand revenue potential and optimize performance.
RevPAR provides a single metric that combines both pricing and occupancy performance, making it useful for comparing properties and tracking performance over time. For outdoor hospitality properties, RevPAR helps owners understand revenue efficiency and optimize pricing strategies.
For example, if a glamping resort has an ADR of $200 and 75% occupancy, the RevPAR would be $150 ($200 × 0.75). This means the property generates $150 per available unit, regardless of whether it's occupied.
Sage Outdoor Advisory includes RevPAR analysis and benchmarking in our feasibility studies, helping clients understand revenue potential and optimize performance.
Examples of RevPAR (Revenue Per Available Room)
- •A glamping resort charges $200/night (ADR) and maintains 80% occupancy. RevPAR = $200 × 0.80 = $160. This means the property generates $160 per available unit, regardless of whether it's occupied. If the resort has 30 units, total potential revenue is $4,800 per night (30 × $160). A competitor with $180 ADR but 90% occupancy has $162 RevPAR, showing higher revenue efficiency. The glamping resort could improve RevPAR by either raising ADR to $225 (if demand supports it) or increasing occupancy through marketing, demonstrating how this single metric combines pricing and demand.
- •An RV park with $75 ADR and 70% occupancy calculates RevPAR = $75 × 0.70 = $52.50. With 100 sites, this generates $5,250 potential revenue per night across all sites. If occupancy drops to 60% while maintaining $75 ADR, RevPAR falls to $45. Alternatively, if they raise rates to $85 and occupancy stays at 70%, RevPAR increases to $59.50. This metric helps owners understand that increasing occupancy or ADR both improve revenue, and guides decisions about whether to focus on pricing strategy or demand generation.
- •Comparing two campgrounds: Campground A has $50 ADR and 65% occupancy = $32.50 RevPAR. Campground B has $45 ADR and 80% occupancy = $36 RevPAR. Despite lower ADR, Campground B generates more revenue per available site due to higher occupancy. This RevPAR comparison reveals Campground A might be overpriced (low occupancy) or needs better marketing, while Campground B's strategy of competitive pricing drives better overall performance.
Common Use Cases
- •Performance measurement
- •Revenue optimization
- •Competitive benchmarking
- •Financial analysis
Related Services
Frequently Asked Questions About RevPAR (Revenue Per Available Room)
How is RevPAR calculated?
RevPAR = ADR × Occupancy Rate, or RevPAR = Total Room Revenue ÷ Number of Available Rooms.
What's a good RevPAR?
RevPAR varies significantly by property type, location, and market. Our market reports provide RevPAR benchmarks by region and property type.
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