Q:

How do you calculate RevPAR?

A:

Quick Answer

To find the RevPAR of a hotel, multiply the average occupancy rate during a given time period time by the average daily room rate. RevPAR stands for revenue per available room, and is a financial measure that hotels use to evaluate their performance in a given time period.

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Full Answer

  1. Find the number of days in your chosen time period

    As an example, find the RevPAR for a hotel with 100 rooms during the month of January, which has 31 days.

  2. Calculate the average room occupancy

    To calculate the average room occupancy in January, divide the number of occupied rooms by the number of available rooms during the time period. In the example, there are 100 rooms available on each day in January, so in total, there are 3100 rooms available for the whole month (100 rooms times 31 days). If a look through hotel records reveals that 2,200 rooms were occupied in January, then the average room occupancy is 2,200 occupied rooms divided by 3,100 available rooms, which equals 0.71.

  3. Calculate average room rate

    To calculate the average room rate, add up all the room rates and divide the sum by the total number of rooms in the hotel. In this example, there are 20 executive rooms in the hotel that cost $100 per night, and 80 regular rooms that cost $75 per night. The sum of all the room rates is 20 executive rooms times $100 plus 80 regular rooms times $75, which equals $8,000. Thus, the average room rate is the sum ($8,000) divided by the total number of rooms (100). $8,000 divided by 100 gives an average rate of $80 per room.

  4. Calculate RevPAR

    To find the final RevPAR, multiply the average occupancy rate during the chosen time period by the average room rate. In the example, RevPAR is 0.71 times $80, which is $56.80.

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