Knowing About Revenue per Available Room (RevPAR) and How Your Hotel Can Increase It

RevPAR in a hotel is an important business performance metric that helps hoteliers in measuring their room revenue for a period of time.

Ideally, it is calculated on regular basis (Daily/Monthly/Yearly) for better results.

And, the formula is: Rooms Revenue/Available Rooms or it’s also calculated as Average Daily Rate (ADR) x Occupancy Rate.

For instance, if you have 20 rooms in your hotel and average daily rate is $200. When the occupancy rate is 80% on any particular day (i.e., 16 rooms are occupied out of 20 rooms), then the total sums up for the earned revenue is $3,200.

In this case, your Hotel RevPAR is calculated as:

Option 1: RevPAR Formula

RevPAR = $3,200/20

= $160

Option 2: RevPAR Formula

RevPAR = $200 x 0.8

= $160

This seems to be a simple and straight calculation, but here you need to understand the fact that compromising on your ADR and getting 100% occupancy is not beneficial.

Increase your profit percentage by acquire high latitude in RevPAR.

Let us hear in about RevPAR in words of – ‘Scott Dahl’ -Director of the Master’s in Hospitality Strategy and Digital Transformation at Les Roches Global Hospitality Education

Video Source: YouTube

Just think about this: Either, you can charge a high room rate to make more money, but fewer guests. Or. You got to compromise on the room rate and see hike in the occupancy. Well, the choice is yours!

Now, everything about the calculation is done and dusted. Let us throw some light on increasing the RevPAR in your hotel, which would let you see an immediate effect.

Get Higher REVIEW Scores

Understand your reputation in the market and closely monitor your guest reviews. It allows you to increase RevPAR.

Think like your guests! They usually look for properties that are best value for money, with high quality service.

Wondering how they decide about a hotel? You guessed it right, by checking out the online review score and even through comparing with other competitors.

That’s the reason it’s essential to keep a tab on your review scores, which will not only achieve higher RevPAR but also lets you increase the pricing while preserving your hotel business’s market share.

Focus on improving your hotel reputation and it will eventually increase your overall revenue.

Offer DISCOUNTS to your Targeted Audience

It’s common that your OTA agreement may restrict you in making deals with public, but you can actually offer discounts to your selected audience comprising of Facebook Fans or available Email List.

That’s the best way to engage your loyal customers and in fact reward them for showing interests in your properties.

Solely relying on OTAs may not be an ideal move all the time. As they may surely fill your rooms, but actually decreases your hotel’s revenue or RevPAR.

Instead of settling for this humdrum routine of charging less, offer your guests with additional attractive amenities or packages and increase the perceived value.

Embrace ALOS (average length of stay) Packages

This is another great strategy to experiment to increase RevPAR. Introduce different packages, which include minimum length of stay during high season and only accept the long term bookings in this range.

Go offer maximum length of stay as well by discount promotions. However, also ensure that you better utilize right to charge for reservation cancellation and make it non-refundable. By practicing this will certainly increase your RevPAR.

Optimize Your MARKETING Game

Increasing your RevPAR in your mind? Start stepping up a perfect marketing game. Invest in digital marketing as it’s a great way to drive traffic to your hotel website and encourage online bookings.

Raise your brand awareness by utilizing the social media platforms. As a guest reads on an average of 6 to 12 reviews before booking a hotel, it’s important for you to thank your guests who left positive reviews and respond to the negative ones and resolve them to improve the guests’ impression on your hotel.

Don’t Miss an EYE on analyzing MARKET TRENDS

As a hotelier, it’s a must for you to monitor the market trends of demand and supply throughout the year.

Identify the time period, in which guests are more likely to visit your hotel. Perhaps, when popular events come to your town.

Ensure your pricing is in the swing of things according to the market demand and it will positively affect your hotel’s RevPAR.

Final Thoughts

Winning RevPAR is all in your hands. Improve your RevPAR and turn bookings into profits, while boosting your reputation.

Beside all the aforementioned strategies, you got to keep your numbers accessible and accurate. Utilize Nimble Property’s RevPAR metric and measure your entire hotel portfolio performance at one place.

Visualize your hotel group KPIs in realtime from anywhere at any time – everything on a single and insightful dashboard of Nimble.

It draws your attention, displays Occupancies, RevPAR and ADRs, lets you do competitive analysis with STR and review GSS, offering many more responsive and useful widgets to run your hotel smoothly.

Overall, it helps you manage end-to-end accounting at one place, leaving more space to identify new opportunities to serve your guests better.

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