What this calculator does
Hotels are measured on two numbers that pull against each other. Average daily rate is what each occupied room earns, and occupancy is what share of rooms sold. RevPAR multiplies them, which is why it is the figure that actually matters.
The trade-off is exact. Selling 200 rooms at $225 and selling 380 rooms at $118.42 produce the identical RevPAR of $112.50, because the same revenue came from the same building. Rate and occupancy can be traded freely; only revenue per available room tells you whether the trade was worth making.
The formula
Average daily rate divides room revenue by rooms sold. Occupancy divides rooms sold by rooms available. RevPAR is the product of the two, which also equals revenue divided by rooms available.
| Term | Meaning |
|---|---|
| ADR | Average daily rate: revenue per occupied room. |
| Occupancy | The share of available rooms that were sold. |
| RevPAR | Revenue per available room, counting empty rooms as well as full ones. |
The inputs explained
| Field | What to enter |
|---|---|
| Total room revenue ($) | Total room revenue for the period. |
| Rooms sold | Number of rooms actually sold. |
| Rooms available | Number of rooms available to sell. |
When to use it
Assessing a pricing decision
Discounting lifts occupancy but cuts rate, and RevPAR says whether the net effect helped.
Comparing properties of different sizes
RevPAR normalises for room count in a way total revenue cannot.
Benchmarking against a competitive set
The three figures together are the standard language of hotel performance reporting.
Worked examples
Every figure in the tables below is produced by this page’s own calculator at build time, so the numbers and the tool always agree. Select any row to load that scenario.
How do rate and occupancy trade off?
The same revenue earned three different ways.
| Rooms sold | ADR (average daily rate) | Occupancy rate |
|---|---|---|
| 200 rooms | $225.00 | 50.0% |
| 300 rooms | $150.00 | 75.0% |
| 380 rooms | $118.42 | 95.0% |
Questions
Why is RevPAR preferred to ADR?
Because ADR ignores empty rooms. A property can post a spectacular rate by selling three suites and leaving the rest dark. RevPAR counts the whole building, which is what the owner actually paid for.
Is high occupancy always good?
No. Occupancy near 100 per cent often means the rate was set too low, since there was clearly demand that would have paid more. Most operators target a balance rather than a full house.
What does RevPAR leave out?
Everything that is not room revenue, and all costs. A property with strong food, beverage and events income may perform well on total revenue while looking ordinary on RevPAR, which is why TRevPAR and GOPPAR also exist.
Why does RevPAR equal revenue divided by rooms available?
Because the rooms-sold term cancels. ADR is revenue over rooms sold, occupancy is rooms sold over rooms available, so multiplying leaves revenue over rooms available. The calculator shows both routes as a check.
For yield on the property itself, see the cap rate calculator. For the margin the operation earns, see the operating margin calculator.