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revpar

Explanation Series: Understanding RevPAR

Calculation

RevPAR = Room Revenue / Rooms Available

In the hotel world RevPAR is arguably the most important term you will learn. The goal in hotels is to not simply have the highest costing rooms or the most occupancy. The goal is combining those by increasing RevPAR. RevPar is revenue per available room. It is a performance metric that is calculated to give you the best understanding of gained or loss revenue. You might also look for TRevPAR which is the total revenue per available room. This is simply calculated by dividing total revenue by available rooms.  This might be useful for larger hotels where rooms aren’t the only source of revenue.

What to do with RevPAR?

It is common to compare your numbers with your competitors to see how you fare. This information will be a good indication if you are over or under priced. You should also do RevPAR comparisons within similar time periods or seasons to get the most accurate comparison. If you are looking at the weekend results you should compare those with other weekend results. The same should be considered for holidays or events. The more historical information you have the more you will be able to see trends on decisions made.

How can I get the important information?

To compile these numbers you can contact data companies that compile these numbers. One that is widely used in the industry is the STAR Report provided by the Smith Travel Research. This company provides blinded information on the industry in small and large scales. They also can provide targeted results so you can really compare apples to apples.

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Explained Series: Understanding RevPAR
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Get the full understanding of RevPAR, from how it is calculated to what you should do with it. We also show you how to get the information you need.
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StartingHospitality.com
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Explanation Series: Understanding RevPAR

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Hospitality professional with in-depth knowledge of front and back office operations, consulting top-level executives with innovative strategies, industry best practices, and providing a custom framework for increasing profitability. Pre-opening team member of properties in the United States and Macau, all ranging from small boutique to mega casino resorts.

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