The term RevPAR is used often in business travel management, but what does it actually mean?

RevPAR is a key performance indicator used by the hotel industry to calculate a given hotel’s financial performance.

It stands for revenue per available room and it’s calculated by multiplying the average daily rate (ADR) with the occupancy rate. For example, if a hotel sold 100 of its 150 available rooms for a total of £11,500, the RevPAR would be:

ADR £115 (11,500 / 100) x occupancy rate 0.67 (100 / 150) = £77.05 RevPAR

However RevPAR is limited as a KPI, in the sense that it doesn’t take into consideration revenue generated from amenities and other hotel services such as spas and gyms.

 

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About the Author:

Maddy is Click Travel’s Content Manager and is responsible for all of our digital and print content, packaging up and presenting the wealth of expertise at Click in a way that works for you.