RevPAR: what revenue per available room means and how to work it out

1. 1Choose the period: one night, a week or a month. Use the same period for every figure in the sum.
2. 2Add up the room revenue for it: what guests paid for rooms, without tax and without breakfast or other extras, the same way you count it for your average room rate.
3. 3Count the rooms available: your rooms multiplied by the nights in the period. Every room you could have sold counts, booked or empty.
4. 4Divide the room revenue by the rooms available. The answer is in rupees: what each room you had brought in, on average, for each night.

• Room revenue: leave out tax, so one month compares with another when the tax changes.
• Room revenue: leave out breakfast, meals, laundry and other extras, unless a package's price can't be split.
• Room revenue: decide whether you count prices before or after booking sites' commission, and keep to it. Before is the more usual.
• Rooms available: count every room you could have sold that night, whether it sold or not.
• Rooms available: rooms given free, to staff or as an apology, still count, with no revenue against them.
• Rooms available: rooms closed for a long renovation are often left out. Whichever you choose, keep to it every month, and ask how any figure you compare with was counted.

The calculator on this page opens on the same month. Put in your own room revenue and rooms available to see yours.

RevPAR is also your average room rate multiplied by your occupancy, written as a share. The two formulas give the same answer: average room rate is room revenue over rooms sold, occupancy is rooms sold over rooms available, and when you multiply them the rooms sold cancel out.

That is why the same RevPAR can come from very different months, and why it is worth knowing which of the two moved.

EHL Hospitality Business School also lists a revenue generation index, which compares your RevPAR with that of the hotels you compete with, so you can see whether you took your share of the town's guests and money.

• What each booking cost you. A room sold through a booking site counts the same as one sold on your own website, though the site keeps a commission.
• What you kept. EHL Hospitality Business School points out that RevPAR measures price and occupancy, while gross operating profit per available room shows what the hotel actually keeps after its costs.
• What the rest of the hotel earned. RevPAR is rooms only; the restaurant, banquets and spa are outside it.
• Which nights did well. A month's figure hides a festival night sold out at an ordinary price, which looks full while bringing in less than it could.

EHL Hospitality Business School calls RevPAR the most widely used single figure in hotel revenue management, because it takes in both price and occupancy. Read it against your own past first.

• Compare it with the same month last year, and the same nights, before you compare it with another hotel's.
• When it falls, check the rate and the occupancy separately. A lower price that filled no more rooms is the first thing to undo.
• Look at your busiest nights on their own, and price them by how busy your town will be, not like an ordinary night.
• On quiet nights, check what the hotels around you charge before you cut your price: if they are full and you are not, price may not be the reason.
• Check that no booking site sells your room for less than your website, which brings in bookings at a lower price and a commission on top.