RevPAR (Revenue per Available Room)

RevPAR is the number hotel owners and asset managers read first, because it moves when either rate or occupancy moves. It comes out of the property management system alongside occupancy and average daily rate, and it is a rooms metric in the strict sense: the revenue in the numerator is room revenue, and everything a guest spends in the restaurant, the bar, or the spa sits outside it.

What is the difference between RevPAR and ADR?

The denominators differ. Average daily rate divides room revenue by rooms sold, so it reports what an occupied room earned. RevPAR divides the same revenue by all rooms available, so it reports what the whole house earned per room whether that room sold or not.

That is why the two can move in opposite directions. A hotel that holds rate and sells fewer rooms raises its ADR while its RevPAR falls, which is the exact pattern a rate-discipline strategy produces and the reason owners ask for both numbers together. Occupancy is the bridge between them: ADR times occupancy is RevPAR.

Why does RevPAR ignore the restaurant?

RevPAR ignores the restaurant by definition. The Uniform System of Accounts for the Lodging Industry, the hotel industry’s reporting standard, keeps rooms and food and beverage as separate departmental statements, so rooms revenue is a defined line that excludes covers, banquets, and bar sales.

The industry’s own answer to this is total revenue per available room, usually written TRevPAR, which puts all departmental revenue over the same room count. TRevPAR is a genuine improvement for a hotel whose restaurant is a real business. It is still a per-room average, so it tells an owner how productive the building is and nothing about which guests produced it.

How does a hotel group measure revenue per guest instead of per room?

By joining the stay record to the spend record for one person, which is work neither system does alone. The property management system knows the stay, the nights, and the rate. The restaurant’s point of sale knows the check. A guest who stayed four nights and dined three times exists as several records in two systems, and no report inside either one can add them up.

A restaurant CRM connected to both reads the stay out of the hotel system and the checks out of the point of sale, then resolves them to a single guest profile. What that changes is the unit of analysis. Instead of asking what a room earned this month, an operator can ask what a returning guest is worth across rooms and restaurant, and whether the guests filling the house are the same ones filling the dining room.