How to calculate RevPAR, ADR and occupancy rate (with a worked example)

Occupancy, ADR and RevPAR are the three figures every hotel, B&B and vacation rental manager should know by heart. Here is how to calculate RevPAR, ADR and occupancy rate, with a worked example, what each one tells you, and which one to watch when you change your prices.

RevPAR, ADR and occupancy: the formulas

All three are counted in room nights: one room sold for three nights counts as three room nights sold. Over a month, rooms available are your rooms multiplied by the nights in the month; many hotels deduct rooms out of order for repairs or blocked for owner stays.

How to calculate RevPAR: a worked example

A 10-room hotel, over a 30-day month:

• Rooms available: 10 rooms × 30 nights = 300 room nights.
• Rooms sold: 210 room nights.
• Room revenue: €25,200.

Then:

• Occupancy = 210 ÷ 300 = 70%
• ADR = €25,200 ÷ 210 = €120
• RevPAR = €25,200 ÷ 300 = €84, the same as €120 × 70%

What counts as room revenue

Room revenue is what you earn from the rooms themselves. Most hotels leave out breakfast, extras, activities and taxes they collect for the authorities, such as VAT or a tourist tax. Whichever way you count, count the same way every month, or your figures will be hard to compare.

RevPAR vs ADR vs occupancy: which one to watch

Each figure alone can mislead:

• A high occupancy can hide prices that are too low: you're full, but leaving money on the table.
• A high ADR can hide empty rooms: each sale earns well, but too few rooms sell.
• RevPAR combines the two. If you raise your prices and RevPAR goes up, the higher rate made up for any rooms you no longer sell. If RevPAR goes down, it didn't.

That's why RevPAR is the figure most hotels steer by. Compare it with the same month last year rather than with the month before: seasonality outweighs most changes you make.

Other figures worth knowing

• ALOS (average length of stay): nights sold ÷ number of bookings. Longer stays mean fewer changeovers and lower cleaning costs.
• Booking lead time: the average number of days between booking and arrival. It tells you how early to open your rates and when last-minute offers make sense.
• TRevPAR (total revenue per available room): like RevPAR, but with every source of revenue, such as breakfast, extras and activities.

How to track them on a WordPress booking site

If your bookings come through Pandao Booking, the free WordPress hotel booking plugin, the reports of Pandao Booking Pro calculate occupancy, ADR and RevPAR for you, for any period, by room type and by booking source, with the booking lead time and average length of stay. They count confirmed bookings night by night, so a stay across two months counts in each, and room revenue after discounts, without the tourist tax and without VAT, with a switch to show it with VAT.

Common questions

What is a good RevPAR?

There's no universal figure: it depends on your location, your type of property and the season. The useful comparisons are with your own past results and with similar properties nearby.

Is ADR the same as my rack rate?

No. Your rack rate is the price you publish; ADR is what you actually earn per room sold, after discounts, promo codes and cheaper rate plans.

Do bookings from Airbnb or Booking.com count?

Yes, they're rooms sold. Count the room price the guest paid, as for any other booking: the platform's commission is a selling cost, not a lower rate. To see what each channel really leaves you, look at its revenue after commission separately (some call this net ADR).