To understand how RevPAR is calculated, we first need to understand ADR and where it comes from.
What is ADR?
Average Daily Rate (ADR) measures the average revenue per occupied room in a given period. It's calculated as:
ADR = Total Room Revenue ÷ Room-Nights Sold
Total Room Revenue is the total revenue generated from selling rooms (see How Does Pricepoint Calculate Booking Totals? for how this figure is calculated).
Room-Nights Sold is the total number of room-nights occupied during the same period.
Example: if a hotel generates $50,000 in room revenue from 250 room-nights sold in a month, ADR = $50,000 ÷ 250 = $200.
What is RevPAR?
Revenue Per Available Room (RevPAR) combines occupancy rate and ADR to measure a property's overall revenue-generating ability. It can be calculated two ways:
RevPAR = Total Room Revenue ÷ Total Available Room-Nights
RevPAR = ADR × Occupancy Rate
Pricepoint displays both formulas. Here's a worked example using both:
Period: 30 days | Total Revenue: $70,000 | Rooms: 100 | Occupancy: 60% | ADR: $38.89
Formula 1: $70,000 ÷ (100 rooms × 30 days) = $23.33
Formula 2: $38.89 × 60% = $23.33
Both formulas produce the same result, confirming ADR and Occupancy Rate are internally consistent with each other.