RevPAR, or revenue per available room, is a hotel performance metric that multiplies average daily rate by occupancy to measure how much room revenue a property earns per available room. RevPAR captures pricing and volume in one number, which is why hotel asset managers treat it as the headline top-line indicator.
How Is RevPAR Calculated?
RevPAR is calculated two mathematically equivalent ways: average daily rate multiplied by occupancy, or total room revenue divided by the number of available room nights. Both produce the same figure. The formula is RevPAR = ADR x Occupancy. Because it blends rate and volume, RevPAR falls when a hotel discounts to fill rooms or when demand softens at a fixed rate.
The two inputs pull in opposite directions, which is the whole point of the metric. A hotel can raise ADR by holding rates firm, but occupancy may drop as price-sensitive guests book elsewhere. It can lift occupancy by cutting rates, but ADR falls. RevPAR is the referee: it rewards only the combinations that grow total room revenue per available room.
Input | Definition | Formula |
ADR | Average revenue per occupied room | Room revenue / rooms sold |
Occupancy | Share of available rooms sold | Rooms sold / rooms available |
RevPAR | Revenue per available room | ADR x Occupancy |
According to CoStar and STR, full-year 2025 U.S. hotel RevPAR was $100.02, built from an ADR of $160.54 and occupancy of 62.3 percent. That was the first full-year RevPAR decline since 2020, down 0.3 percent year over year even as ADR rose 0.9 percent, because occupancy fell 1.2 percent.
Why RevPAR Matters
RevPAR matters because it is the single number that tells a hotel asset manager whether pricing and occupancy strategy is working together rather than fighting each other. A rising ADR looks good in isolation, but if it comes from pushing rates so high that rooms sit empty, RevPAR exposes the loss. RevPAR is the metric a lender, owner, or buyer benchmarks first.
The operator-side risk is optimizing one lever at the expense of the metric. Chasing occupancy with deep discounts can fill a hotel while destroying RevPAR, and defending rate through a downturn can protect ADR while occupancy and RevPAR collapse. Disciplined revenue management targets RevPAR directly, then works backward to the rate and occupancy mix that produces it.
Example
A 200-room hotel wants to compare two pricing strategies for the same month. Strategy A holds a high rate; Strategy B discounts to drive volume. RevPAR = ADR x Occupancy settles which one wins.
Strategy | ADR | Occupancy | RevPAR | Monthly room revenue (200 rooms x 30 nights) |
A (hold rate) | $220.00 | 68% | $149.60 | $897,600 |
B (discount) | $185.00 | 82% | $151.70 | $910,200 |
Strategy A: $220.00 x 0.68 = $149.60 RevPAR. Strategy B: $185.00 x 0.82 = $151.70 RevPAR. Despite a $35 lower ADR, Strategy B produces a higher RevPAR and roughly $12,600 more room revenue for the month. RevPAR revealed that the added volume outweighed the rate cut, a conclusion neither ADR nor occupancy could show alone.
Variations and Edge Cases
RevPAR behaves differently by scope and by what revenue it counts, so two RevPAR figures are only comparable when defined the same way. The table below lists the variants an asset manager should reconcile before benchmarking.
Variant | Treatment |
Total RevPAR (TRevPAR) | Includes food, beverage, and ancillary revenue, not rooms only |
GOPPAR | Gross operating profit per available room; a profit metric, not a revenue one |
Comparable set RevPAR | Benchmarks the subject against a defined competitive set |
RevPAR index (RGI) | Subject RevPAR divided by comp-set RevPAR, times 100 |
Displacement | Group blocks can raise occupancy while lowering RevPAR if rates are too soft |
The common mistake is comparing a rooms-only RevPAR against a total RevPAR that bundles food and beverage. The two answer different questions and are not interchangeable.
RevPAR vs ADR
RevPAR is often confused with ADR, and they measure different things. RevPAR is revenue per available room, spreading room revenue across every room whether sold or not. ADR is revenue per occupied room, dividing room revenue only by rooms actually sold. One reflects both pricing and demand; the other reflects pricing alone.
The relationship is direct: RevPAR = ADR x Occupancy, so RevPAR is always at or below ADR and equals it only at 100 percent occupancy. A hotel can post a strong ADR and a weak RevPAR at the same time if occupancy is low. Reading ADR without RevPAR hides empty rooms; reading RevPAR without ADR hides whether the revenue came from rate or volume.
Frequently Asked Questions
How do you calculate RevPAR?RevPAR equals average daily rate multiplied by occupancy, or total room revenue divided by available room nights. Both methods give the same result. A hotel with a $160 ADR and 62 percent occupancy has a RevPAR of $99.20.
What is the difference between RevPAR and ADR?RevPAR is revenue per available room and reflects both pricing and occupancy. ADR is revenue per occupied room and reflects pricing alone. RevPAR equals ADR only when the hotel is 100 percent full; below that, RevPAR is always lower than ADR.
What is a good RevPAR?There is no universal benchmark because RevPAR depends on market, class, and season. According to CoStar and STR, full-year 2025 U.S. hotel RevPAR averaged $100.02. Judge a property against its own competitive set, not a national average.
Related Terms
Average Daily Rate
Physical Occupancy
Net Operating Income
Market Rent
Broker Analytics