The Formula for calculating Revenue per Available Room (RevPAR)
Revenue per Available Room (RevPARThe formula for RevPAR calculation: RevPAR = Total Room Revenue / Total Number of Available Rooms fo...) – RevPAR is one of the most important statistics in the hotel industry. RevPAR divides the total revenue generated by the hotel by the number of available rooms to sell (Available rooms = Total rooms in the hotel – Out of Order rooms).
It measures in effect the revenue generation capability of the hotel. Hotels with large food & beverage operations and other recreational facilities have RevPAR well above the average Daily Rate.
The downside of RevPAR is the formula only evaluates your income from room sales ie it does not include other revenue-generating areas like Food and Beverage, Spas, Recreational facilities, etc. Those hotels with fewer revenue centres have RevPAR numbers closer to their ADR / ARR.
The formula for RevPAR calculation
RevPAR = Total Room Revenue / Total Number of Available Rooms for sale
The FO formula for calculating a hotel’s performance is based on the metric of Revenue Per Available Room (RevPAR) and Total Revenue Per OccupiedA room status term indicating that a guest is currently registered to the room. Room (TRevPOR). RevPAR is calculated by multiplying the average daily room rate by the hotel’s occupancy rate. TRevPOR, on the other hand, is calculated by dividing the total revenue generated by the hotel by the total number of occupied rooms.
Revenue Per Available Room (Rev Par) Calculator:
Example 1:
Total Room Revenue for 01st Sep 2017 = 14,585.26
Total Available Rooms for sale 01st Sep 2017 = 258
RevPAR = 14585.26 / 258
= 56.53
Example 2:
Total Room Revenue for 30th Aug 2017 = 22,890.00
Total Available Rooms for sale 30th Aug 2017 = 257
RevPAR = 22890.00 / 257
= 89.06
Example 3 – Monthly RevPAR:
Total Room Revenue for September 2017 = 682,800.00
Total Available Rooms for sale September 2017 = 7750
RevPAR = 682,800.00 / 7750
= 88.10
TRevPOR (Total Revenue per Occupied Room) – Is a measure to calculate total hotel revenue per occupied room. Which is calculated or derived from the sum of room revenue, food and beverage (F&B) revenue, and other revenues divided by the total occupied room.
The formula for TRevPOR calculation
TRevPOR = (Room + F&B + Other Revenue) / Total occupied rooms
Example 1:
Total HotelA Hotel or Inn may be defined as an establishment whose primary business is providing lodging facili... Revenue for 01st Sep 2017 = 25,585.26
Total Rooms Occupied for 01st Sep 2017 = 230
TRevPOR = 25,585.26 / 230
= 111.24
Example 2:
Total Hotel Revenue for 30th Aug 2017 = 33,890.00
Total Rooms Occupied 30th Aug 2017 = 225
TRevPOR = 33,890.00 / 225
= 150.62
Example 3 – Monthly TRevPOR:
Total Hotel Revenue for August 2017 = 775,090.00
Total Rooms Occupied for August 2017 = 6820
TRevPOR = 775,090.00 / 6820
= 113.64
These metrics are crucial for hotel managers and owners to understand, as they provide insights into the hotel’s financial performance and help in making informed decisions related to pricing, marketingA system of interrelated activities formulated to plan; price; promote and make available the servic..., and operations. By tracking RevPAR and TRevPOR, hotel managers can identify areas of strength and weakness, and take corrective actions to improve the hotel’s overall performance.
To calculate RevPAR and TRevPOR, managers need to have access to accurate data on room rates, occupancy rates, and total revenue generated. This data can be obtained from the hotel’s property management system (PMS) and other sources such as online travel agencies (OTAs) and revenue management tools.
Overall, the FO formula and RevPAR/TRevPOR metrics are essential tools for hotel managers and owners to optimize their revenue and improve their bottom line.
