Occupancy, ADR and RevPAR explained, with worked examples
Three numbers describe how a hotel is selling. Each is simple; reading them together is where the decisions are.
Occupancy is the share of rooms you sold. ADR (average daily rate) is the average price of a room you sold. RevPAR (revenue per available room) is room revenue divided by every room you had — sold or not — and it equals occupancy × ADR. Together they say whether you are selling enough rooms, at the right price.
The formulas
| Metric | Formula | Answers |
|---|---|---|
| Occupancy | Rooms sold ÷ rooms available | Are we full enough? |
| ADR | Room revenue ÷ rooms sold | Are we charging enough for what we sell? |
| RevPAR | Room revenue ÷ rooms available (= Occupancy × ADR) | How well did every room earn, sold or empty? |
“Rooms available” is room-nights: a 20-room hotel over a 30-day month has 600.
A worked example
A 20-room hotel, one June night:
- 16 rooms sold, room revenue €1,920.
- Occupancy = 16 ÷ 20 = 80%.
- ADR = €1,920 ÷ 16 = €120.
- RevPAR = €1,920 ÷ 20 = €96 (and 80% × €120 = €96).
Now the same night a year later: 19 rooms sold for €1,995. Occupancy is 95%, ADR is €105, RevPAR is €99.75.
RevPAR rose — but ADR fell by €15. The hotel filled up by getting cheaper. Was that right? If the extra three rooms would have stayed empty, yes. If the hotel would have filled anyway, it gave away €15 on sixteen rooms that would have paid €120.
How to read them together
- Occupancy high, ADR flat or falling: you may be underpriced. Try raising rates on the nights that fill earliest.
- Occupancy low, ADR high: you may be priced out on those dates — or demand is simply low. Check what is booked for the same dates last year.
- RevPAR up, ADR down: fine if those were nights you could not otherwise fill. Check the pickup.
Compare like with like
A Saturday compared with a Tuesday tells you nothing. When comparing with last year, compare the same weekday, 364 days apart, not the same calendar date. And look at the year so far, not only one night.
Three common mistakes
- Including taxes or breakfast in ADR. ADR is room revenue. Keep extras separate, or your price comparisons drift.
- Changing what counts as available without saying so.
- Reading the dashboard and the report from different formulas. If two screens disagree, people stop trusting both.
In Revio
The RevioCRS dashboard shows occupancy, ADR, RevPAR and pickup, compared with the same weekday last year or last week. The dashboard and every report read the same formula sheet, so they cannot disagree.
Questions
Which is the most important: occupancy, ADR or RevPAR?
RevPAR, because it combines the other two. But never act on RevPAR alone: the same RevPAR can come from a full hotel at a low price or a half-empty one at a high price, and those call for opposite decisions.
Should out-of-order rooms count as available?
Be consistent and say which you chose. Many hotels exclude rooms that cannot be sold; others keep the full count so year-on-year figures stay comparable. The mistake is mixing the two.
What is a good RevPAR?
Only your own history and your direct competitors answer that. Compare the same week last year — adjusted to the same weekday — and properties of your size in your town.
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