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Many owners judge a month by how full the hotel felt. But a full hotel at low prices can earn less than a 70% full hotel at good prices. Three numbers, occupancy, ADR and RevPAR, tell the real story.
1. Occupancy
Occupancy = rooms sold ÷ rooms available × 100
20 rooms × 30 nights = 600 room nights. If you sold 420, occupancy is 70%.
2. ADR (Average Daily Rate)
ADR = room revenue ÷ rooms sold
₹12,60,000 room revenue ÷ 420 rooms sold = ₹3,000 ADR.
3. RevPAR (Revenue Per Available Room)
RevPAR = room revenue ÷ rooms available, or occupancy × ADR.
₹12,60,000 ÷ 600 = ₹2,100 RevPAR.
RevPAR combines both: it rises when you fill rooms and when you sell them at better prices.
Why RevPAR matters more than occupancy
| Month | Occupancy | ADR | RevPAR |
|---|---|---|---|
| A (heavy discounts) | 90% | ₹2,200 | ₹1,980 |
| B (smart pricing) | 72% | ₹3,000 | ₹2,160 |
Month B earns more and has lower housekeeping and laundry costs.
How to use these numbers
- Track monthly, and compare with the same month last year
- Look at weekdays and weekends separately
- Calculate net ADR after OTA commission. See OTA commission explained
- If occupancy is high but RevPAR is flat, your prices are probably too low. See hotel room pricing
Where to get the data
A PMS calculates these automatically. See hotel PMS software. A simple spreadsheet with daily rooms sold and revenue works too.
FAQs
What is a good RevPAR?
It depends on your city, category and season. Compare with your own past results and nearby competitors rather than a national number.
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