Revenue per available room (RevPAR) has long been the hotel industry’s key benchmarking metric. Its success as a key performance indicator (KPI) is primarily the result of how easy it is to gather the information, calculate and understand results.
RevPAR combines the results of both occupancy and average rate into one number. Calculating RevPAR is easy, because all you need is occupancy and average daily rate:
RevPAR = Occupancy * ADR
However, its simplicity and comprehensibility conceal its shortcomings.
Here we illustrate why RevPAR doesn’t tell a hotel’s full story.
HotStats provides a unique profit-and-loss benchmarking service to hoteliers from across the globe that enables monthly comparison of hotels’ performance against competitors. It is distinguished by the fact that it maintains in excess of 500 key performance metrics covering 70 areas of hotel revenue, cost, profit and statistics, providing far deeper insight into the hotel operation than any other tool. The HotStats database totals millions of hotel rooms worldwide. For more information, visit www.hotstats.com.