How to calculate RevPAR, and what it leaves out

To calculate RevPAR (revenue per available room), divide room revenue by the number of rooms available in the period. A 60-room hotel has 1,800 rooms available over a 30-night month, so £175,500 of room revenue gives a RevPAR of £97.50. You get the same figure by multiplying average daily rate (ADR) by occupancy.

Hotels use RevPAR because it combines price and volume in one number, which makes months easy to compare and easy to benchmark against similar hotels. It also leaves out a lot: what it cost to service the rooms, the commission paid to sell them, and everything guests spend outside their room. Reading it next to TRevPAR, GOPPAR or a net RevPAR figure fills most of those gaps.

How is RevPAR calculated?

CoStar's STR Benchmark glossary defines the three base metrics like this:

• Occupancy = rooms sold ÷ rooms available
• ADR = room revenue ÷ rooms sold
• RevPAR = room revenue ÷ rooms available

Multiplying ADR by occupancy gives the same RevPAR, because rooms sold cancels out. Rooms available is the number of rooms multiplied by the number of days in the period, so 100 rooms over a 31-day month gives 3,100. Rooms sold excludes complimentary rooms, and room revenue is the revenue from renting guest rooms. A comped room therefore does not count as sold, so it adds nothing to occupancy, ADR or RevPAR.

Two choices change the result, so settle them before you compare periods. One is whether rooms out of order come out of rooms available. The other is how you split a package rate between the room and the breakfast or dinner included in it. If you submit data to a benchmarking provider, follow its reporting rules so your figures match the hotels you are compared with, and if you run more than one hotel, use the same definitions at every property.

A worked RevPAR example

Say a 60-room hotel sells 1,350 room nights in April and earns £175,500 in room revenue, excluding VAT.

Now say the same hotel had instead sold 1,170 room nights at an ADR of £150. Room revenue is still £175,500 and RevPAR is still £97.50, this time at 65% occupancy.

Why the same RevPAR can mean different results

Those two Aprils look identical in a RevPAR report, but they are different months to run. At 75% occupancy the hotel cleaned 180 more rooms, laundered more linen and served more breakfasts. It also had 180 more room nights of guests who might have eaten in the restaurant or booked the spa. At 65% it spent less on servicing rooms and had fewer people in the building to spend money elsewhere.

Neither month is automatically better. In a hotel where almost all revenue comes from rooms, the higher-rate month may well be more profitable. In a resort where guests spend heavily on food and treatments, the extra occupied rooms may be worth more than the extra £20 of rate. RevPAR cannot tell you which of those you are running.

TRevPAR, GOPPAR and net RevPAR

Three related metrics cover what RevPAR misses. All of them keep rooms available as the denominator, so they sit easily next to RevPAR in the same report.

Back to the 75% month. If the hotel also took £90,000 in food and beverage, £36,000 in the spa and £13,500 in other revenue, total revenue is £315,000 and TRevPAR is £175. Revenue from cross-selling spa treatments and dinners to staying guests, or from selling pool and spa passes to non-residents, shows up in TRevPAR but not in RevPAR.

Gross operating profit is a line in the Uniform System of Accounts for the Lodging Industry (USALI), the standard format for hotel operating statements, now in its 12th revised edition with an adoption date of 1 January 2026. It is total departmental profit minus undistributed operating expenses. Management fees, rent, business rates and insurance sit below it, so it reflects the costs the hotel team can most directly influence. If gross operating profit for the month was £94,500, GOPPAR is £52.50.

Net RevPAR is less standardised, and hotels differ on which costs they subtract. HSMAI's glossary takes direct customer acquisition costs, such as commissions, transaction fees and loyalty expenses, off room revenue. In the example, say £70,200 of room revenue came through online travel agents at an assumed 15% commission. That is £10,530 in commission, which leaves £164,970 and a net RevPAR of £91.65 before any other acquisition costs. Decide which costs you include and keep the definition the same every month.

What does RevPAR leave out?

• RevPAR rises when you sell more rooms, even if the extra housekeeping hours and laundry cost more than those rooms brought in.
• A room sold through an online travel agent counts the same as a direct booking, although one of them carries a commission.
• Restaurant, bar and spa revenue are excluded. So are cancellation fees and resort fees, which STR's glossary lists as miscellaneous revenue.
• Ten one-night stays and one ten-night stay can produce the same room revenue, but the first means ten check-ins and ten room turnarounds.
• It says nothing about whether guests come back, join a membership or book an event later.
• A RevPAR increase in a month when competing hotels grew faster still means you lost share.

How do you compare RevPAR with other hotels?

Benchmarking compares your RevPAR with a competitive set of similar hotels nearby. In CoStar's STR Benchmark the result is a RevPAR index, also called the revenue generating index (RGI): your RevPAR divided by the competitive set's RevPAR, multiplied by 100. An index of 100 means you earned your fair share, and 110 means 10% more than your share.

In a month shaped by a big event, bad weather or a new hotel opening nearby, the index tells you more than the raw RevPAR. Read it next to the occupancy index (MPI) and the average rate index (ARI), which show whether a gain or loss came from volume or from price.

For decisions inside the hotel, read RevPAR next to TRevPAR or GOPPAR, the share of bookings from each channel and spend per occupied room. Those figures are easier to produce from a PMS that records rooms, dining and spa against the same guest. If you want to know which guests are worth a lower rate, customer lifetime value answers that better than any per-room metric.

Seeing what RevPAR leaves out in Tiquo

Tiquo runs room bookings on the same platform as spa appointments, table reservations and point-of-sale orders, and records them against one customer profile. Its analytics can be filtered by location, sublocation and date range and compared with an earlier period, so spa and restaurant revenue can be read next to the rooms side of the business. Predictive customer lifetime value adds an estimate of which guests are likely to be worth more over time.