However, there are alternatives to RevPAR that can help hoteliers better measure both profitability and growth by taking into account several other factors - namely costs and occupancy rates. But as useful as it is to illustrate growth, RevPAR doesn’t account for profit - and while growth and profit sometimes go hand in hand, this is not always the case. RevPAR is important because it helps hoteliers measure the overall success of their hotel. There are two formulas you can use to calculate RevPAR: What is the RevPAR formula? How to Calculate RevPAR? If a property’s RevPAR increases, that means the average room rate or occupancy rate is increasing. RevPAR is used to assess a hotel’s ability to fill its available rooms at an average rate. Since it’s such a widely used metric, RevPAR can help hotels measure themselves against other properties or brands. RevPAR helps hotels measure their revenue generating performance to accurately price rooms. RevPAR represents the revenue generated per available room, whether or not they are occupied. Looking for more resources to help you excel in revenue management? Check out our Hospitality market trends report for fresh, comprehensive hospitality market data to help inform your business and pricing strategy. RevPAR Formula & Meaning: RevPAR is a key performance indicator (KPI) that many hoteliers consider the most important of all is RevPAR (Revenue Per Available Room).
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