Potential Average Rate (PAR) Online Calculator

PARPAR (Potential Average Rate) = Room Revenue at Published Tariff or Rack Rate / Number of Rooms sold.... or Potential Average Rate is a very important ratio in the revenue management department. The Potential Avg. Rate (PAR) is a collective statistic that combines the potential average rate, multiple occupancy percentages, and the rate spread.

There are two steps involved in calculating the potential average rate:

Step 1: This is by multiplying the Rate Spread by the hotel’s Multiple Occupancy Percentage.

Step 2: Add the result from Step 1 to the hotel’s Average Single Rate which will then give the ‘Potential Average Rate (PAR)’

The Formula for Potential Average Rate (PAR)

Potential Average Single Rate = (Multiple Occupancy Percentage X Rate Spread) + Potential Average Single Rate

Potential Average Rate (PAR) Calculator:

Example 1 – Potential Avg. Rate:

Multiple Occupancy PercentageMultiple Occupancy Percentage is used to determining the double occupancy ratio of the hotel and to ... = 9.00

Rate Spread                            = 25.00

Potential Avg. Single Rate         = 125.00

Potential Average Rate (PAR)    = (9.00 X 25.00) + 125

                                            = (225) + 125

                                           = 350

Example 2 – Potential Avg. Rate:

Multiple Occupancy PercentageOccupancy Percentage is the most commonly used operating ratio in the hotel front office; The Occupa... = 5.00

Rate Spread                            = 15.00

Potential Avg. Single Rate         = 105.00

Potential Average Rate (PAR)    = (5.00 X 15.00) + 105.00 

                                             = (75) + 105

                                             = 180

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