The RevPAR formula
RevPAR = rooms revenue ÷ rooms available
RevPAR = ADR × occupancy
Both give the same result, because the two building blocks are defined from the same numbers:
- Rooms available = rooms in the hotel × days in the period, counted in room nights.
- Occupancy = room nights sold ÷ rooms available.
- ADR (average daily rate) = rooms revenue ÷ room nights sold.
Multiply ADR by occupancy and the room nights sold cancel out, leaving rooms revenue ÷ rooms available. Use the first form when you have the totals and the second when you are testing a rate or an occupancy forecast.
Working through the example
Harborview Hotel has 96 rooms. September has 30 days, so there are 96 × 30 = 2,880 room nights to sell. The hotel sold 2,218 of them, an occupancy of 2,218 ÷ 2,880 = 77.01%. Rooms revenue was $383,714, so the ADR is $383,714 ÷ 2,218 = $173.00.
RevPAR is $383,714 ÷ 2,880 = $133.23. The check row multiplies ADR by occupancy and lands on the same $133.23. If the two ever differ in your own sheet, one of the inputs is wrong, usually rooms revenue that includes something it should not.
Only rooms revenue goes into RevPAR: the room rate net of sales tax, occupancy tax and VAT. Breakfast, restaurant, spa, parking and resort fees stay out. Complimentary rooms are usually excluded from rooms sold, and rooms that are out of order for long periods are sometimes taken out of rooms available. Whatever your hotel does, keep it the same every month so the numbers stay comparable.
Worked example: RevPAR, TRevPAR and GOPPAR for one month
Eight inputs in yellow, every result a formula. The hotel and its numbers are fictional. Revenue figures are net of sales and occupancy taxes.
| A | B | Formula in B | |
|---|---|---|---|
| 1 | Harborview Hotel, September 2026 | Value | |
| 2 | Rooms in the hotel | 96 | |
| 3 | Days in the month | 30 | |
| 4 | Room nights sold | 2,218 | |
| 5 | Rooms revenue ($) | 383,714.00 | |
| 6 | Food & beverage and other revenue ($) | 141,200.00 | |
| 7 | Departmental expenses ($) | 176,500.00 | |
| 8 | Undistributed operating expenses ($) | 139,800.00 | |
| 9 | Rooms available (room nights) | 2,880 | =B2*B3 |
| 10 | Occupancy | 77.01% | =B4/B9 |
| 11 | ADR, average daily rate ($) | 173.00 | =B5/B4 |
| 12 | RevPAR ($) | 133.23 | =B5/B9 |
| 13 | Check: ADR × occupancy | 133.23 | =B11*B10 |
| 14 | Total revenue ($) | 524,914.00 | =B5+B6 |
| 15 | TRevPAR, total revenue per available room ($) | 182.26 | =B14/B9 |
| 16 | Gross operating profit, GOP ($) | 208,614.00 | =B14-B7-B8 |
| 17 | GOPPAR ($) | 72.44 | =B16/B9 |
| 18 | Competitive set RevPAR ($) | 126.40 | |
| 19 | RevPAR index (RGI) | 105.4 | =B12/B18*100 |
| 20 | Rate test: ADR ($) | 155.00 | |
| 21 | Rate test: expected occupancy | 84.0% | |
| 22 | Rate test: RevPAR ($) | 130.20 | =B20*B21 |
Why RevPAR beats occupancy or ADR alone
Suppose the revenue manager cuts the rate to $155 and expects occupancy to rise to 84%. Occupancy looks better, but RevPAR falls to $155 × 84% = $130.20, about $3 below the current $133.23. Over 2,880 room nights that is $8,738 less rooms revenue in the month, with about 200 more rooms to clean.
The opposite mistake is just as common: raising rates until ADR looks impressive while the hotel empties. RevPAR catches both, which is why revenue management compares rate scenarios on RevPAR, or better on profit per available room, rather than on either half alone.
TRevPAR and GOPPAR: adding the rest of the hotel
RevPAR ignores everything a guest spends outside the room and every cost. Two related numbers close those gaps:
- TRevPAR (total revenue per available room) = total revenue ÷ rooms available. With $141,200 of food, beverage and other revenue, it is $524,914 ÷ 2,880 = $182.26.
- GOPPAR (gross operating profit per available room) = GOP ÷ rooms available. GOP is total revenue minus departmental expenses and undistributed operating expenses, as defined in the USALI hotel accounting standard. Here GOP is $208,614, about 40% of total revenue, and GOPPAR is $72.43.
GOPPAR is the number owners care about most, because a RevPAR gain bought with heavy discounts on booking platforms or expensive extra staff may not reach profit at all. Hotel investors take GOP further down to net operating income and value the property with a cap rate, as shown in the cap rate calculation guide.
The RevPAR index: comparing with competitors
Is $133.23 good? It depends on the market, the season and the type of hotel, so the useful comparison is with a competitive set, a handful of similar hotels nearby, usually from a benchmarking report. The RevPAR index (RGI) = your RevPAR ÷ comp set RevPAR × 100. With a comp set RevPAR of $126.40, Harborview scores 105.4: it earns 5.4% more per available room than its competitors. Below 100 means you are losing your fair share. The same idea applied to occupancy and ADR shows which half of RevPAR causes the gap.
Quarters, years and short-term rentals
For a quarter or a year, never average the monthly RevPARs or occupancies. Months have different numbers of days and very different demand. Add up rooms revenue, room nights sold and rooms available for the whole period first, then divide.
The same RevPAR calculation works for a short-term rental with one or a few units: nights available instead of rooms available, and nightly revenue without cleaning fees and platform fees. A single apartment that is booked 60% of the nights at $190 has a RevPAR of $114 per available night, which is the fairest number to compare with a long-term rent or with the listing next door.
Common mistakes
- Dividing by rooms sold instead of rooms available. That gives the ADR, not RevPAR. RevPAR spreads rooms revenue over every room you could have sold.
- Including food, beverage or fees in rooms revenue. Breakfast, parking and resort fees inflate ADR and RevPAR. Track them in TRevPAR instead.
- Averaging monthly ratios for a quarter or a year. Divide the period totals. A 30-day month and a 31-day month do not weigh the same.
- Leaving taxes in the room rate. Sales tax, occupancy tax and VAT belong to the government. Use net rooms revenue.
- Chasing occupancy with discounts. A fuller hotel can earn less. Compare scenarios on RevPAR or, better, on profit per available room.
- Changing the room count without saying so. If rooms out of order are removed from rooms available in one month but not the next, the trend is meaningless.
Frequently asked questions
How do you calculate RevPAR?
Divide rooms revenue for the period by the number of room nights available, which is rooms times days. Or multiply the average daily rate by the occupancy rate. Both give the same answer.
What is the difference between ADR and RevPAR?
ADR divides rooms revenue by the room nights actually sold, so it is the average price paid. RevPAR divides the same revenue by all room nights available, so it also reflects how full the hotel was. RevPAR is always equal to or lower than ADR.
What is a good RevPAR?
There is no universal figure, because RevPAR depends on location, season and hotel type. Compare it with the same month last year and with a competitive set of similar hotels. A RevPAR index above 100 means you are beating that set.
What is the difference between RevPAR and GOPPAR?
RevPAR measures rooms revenue per available room and ignores costs. GOPPAR divides gross operating profit, which is total revenue minus operating expenses, by rooms available, so it shows whether the revenue actually turns into profit.