RevPAR, ADR and occupancy: the hotel metrics that matter (with formulas)
RevPAR (revenue per available room) is the hotel industry's core performance metric: room revenue divided by rooms available, or ADR × occupancy. It answers the question neither rate nor occupancy answers alone — how well you're monetizing the whole building. This guide covers the formulas, a worked example and the levers that actually move each number.
The three formulas
Occupancy measures how full you are; ADR measures how much each sold room earns; RevPAR combines both into one number per available room. Because RevPAR includes empty rooms in the denominator, it punishes both discounting and vacancy — which is exactly why the industry standardized on it.
| Metric | Formula | What it tells you |
|---|---|---|
| Occupancy | Rooms sold ÷ rooms available × 100 | Demand capture |
| ADR (average daily rate) | Room revenue ÷ rooms sold | Pricing power |
| RevPAR | Room revenue ÷ rooms available — or ADR × occupancy | Total room-revenue efficiency |
A worked example
A 40-room hotel sells 30 rooms tonight at an average of $120. Occupancy: 30 ÷ 40 = 75%. ADR: $3,600 ÷ 30 = $120. RevPAR: $3,600 ÷ 40 = $90 (or $120 × 0.75). Now compare strategies: dropping the rate to $100 to sell 36 rooms gives RevPAR $90 — identical revenue, six more rooms to clean and six more breakfasts. Raising the rate to $135 and selling 28 gives RevPAR $94.50 — more revenue with less wear. RevPAR is the tiebreaker between 'full' and 'profitable'.
What's a good RevPAR?
There's no universal number — a beach resort in high season and a highway hotel live in different worlds. Benchmark against yourself (same month last year, adjusted for renovations and events) and against your competitive set via reports like STR, where the RevPAR index tells you your fair share: an index of 100 means you capture exactly your share of the market's room revenue; below 90 signals a pricing, product or distribution problem worth diagnosing.
The levers that move RevPAR
RevPAR moves through rate, occupancy or mix. The most underused lever for independents is channel mix: a booking that arrives direct instead of through an OTA nets 15–25% more revenue at the same posted rate — mathematically equivalent to a rate increase the guest never sees.
- Dynamic pricing — rates that follow demand (events, seasons, day of week) instead of a laminated rate card.
- Length-of-stay controls — minimum stays on peak dates push occupancy into shoulder nights.
- Direct channel growth — every point of booking share moved from OTA to direct adds net revenue without touching the rate.
- Upsells — room upgrades, late checkout and packages raise revenue per stay after the booking.
- Review score — rating improvements support measurably higher rates at equal occupancy.
Beyond RevPAR: TRevPAR, GOPPAR and NRevPAR
RevPAR only counts room revenue. TRevPAR (total revenue per available room) adds F&B, spa and other income — essential for resorts. GOPPAR (gross operating profit per available room) subtracts operating costs, exposing when high RevPAR hides expensive occupancy. NRevPAR nets out distribution costs — OTA commissions included — which is where channel mix shows its real effect: two hotels with identical RevPAR can differ wildly in NRevPAR if one pays commission on 90% of its bookings.
How GuruHotel helps
GuruHotel turns a hotel's official website into a direct booking channel: an AI-built site, a conversion-optimized booking engine, real-time inventory synced with your PMS (Cloudbeds direct, 345+ more via Channex) and Stripe-powered payments — commission-free on every direct reservation.
FAQ
How do I calculate RevPAR?
Divide total room revenue by total rooms available in the period (not rooms sold), or multiply ADR by occupancy rate. Example: $3,600 revenue across 40 available rooms = $90 RevPAR. Use rooms out of order consistently — most operators keep them in the denominator unless removed long-term.
What is the difference between RevPAR and ADR?
ADR averages revenue over rooms you sold; RevPAR spreads it over every room you had. A hotel can post a high ADR while half the building sits empty — RevPAR exposes that. Together they diagnose the problem: low ADR means a pricing issue, low occupancy means a demand issue, low RevPAR with decent both means a mix issue.
Does RevPAR include taxes and fees?
No — standard practice uses net room revenue, excluding taxes, resort fees and F&B. Consistency matters more than the convention you pick: mixing gross and net figures across months makes trends meaningless.
How does GuruHotel relate to this?
GuruHotel provides an AI-built hotel website, a direct booking engine, real-time inventory and Stripe-powered payments, helping independent hotels grow commission-free direct bookings alongside their OTA channels.