Restaurants, hotels and travel
RevPAR (revenue per available room)
Rooms revenue divided by all rooms available: occupancy times ADR.
Facts checked against sources onWhat does RevPAR (revenue per available room) mean?
RevPAR is rooms revenue divided by the number of rooms available, whether sold or not. It equals occupancy multiplied by ADR. Example: a hotel at 80 percent occupancy and an ADR of 150 has RevPAR of 0.80 x 150 = 120. It is the main measure of hotel performance because it captures both price and volume. Another hotel at 90 percent occupancy and an ADR of 125 has a lower RevPAR (112.50), even though it is fuller. RevPAR covers rooms only; total revenue per available room (TRevPAR) adds food, drink and other income.
Where does it come up in case interview prep?
Related terms
- Occupancy rateThe share of available rooms (or beds) that are filled over a period.
- ADR (average daily rate)The average price paid per hotel room sold.
- GOP (gross operating profit)A hotel's profit after the costs of running it, before fees, rent and ownership costs.
- Operating leverageHow much profit swings when revenue changes, because of fixed costs.
- Prime costFood and drink cost plus labour cost, the two biggest restaurant costs.
- Table turnsHow many times each table is used by a new group in a meal period or day.
- CoverOne guest served a meal: the unit restaurants count.
- Same-store sales (comparable sales)The US name for like-for-like sales: growth at restaurants or stores open in both periods.
Learn it in context
See RevPAR (revenue per available room) at work in a lesson from How industries work: the toolkit, with checks as you go.
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