What does hotel revpar mean?

RevPAR is an indicator of hotel operating ratio, which is the abbreviation of income per available room.

It means "average income per room available for rent".

The calculation formula is: RevPAR= room income ÷ number of rooms available for rent.

Or RevPAR= average house price × room occupancy rate.

In the daily operation of hotels, we often take the room occupancy rate and average house price as the evaluation indicators of hotel management level, and many hotels take this as the main basis for business plan, budget revenue, performance appraisal of managers and so on.

Two commonly used concepts are often used in room revenue management. One is the room yield, and the other is RevPAR.

Room output:

Is to consider the ratio of the actual income of the room to the income from selling all the rooms at the retail price. The calculation formula is: room yield = (actual room income ÷ target income) × 100%.

Among them, the actual room income = the actual average house price × the number of rooms for rent, and the target room income = the listing price of the store × the number of all rooms.

Because in practical work, it is unrealistic to sell all rooms at the listed price, hotels are affected by many uncertain factors such as market supply and demand, their own operating level, market positioning, consumption level and surrounding competitive environment.

Therefore, it is not scientific enough to use the ratio of actual room income to target income to reflect room income.

Advantages of RevPAR:

In the calculation formula of RevPAR, room income, room occupancy rate and average house price are all real data, so RevPAR directly reflects the actual average income value of each room and more intuitively reflects the quantity and quality of room management.

RevPAR can not only measure the operating ability of hotel operators, but also see the gap with the expected return on investment.