RevPAR is a key hotel metric. What does it stand for and what does it primarily measure?

• A. Revenue per available room
• B. Revenue per occupied room
• C. Average daily rate
• D. Occupancy efficiency

Answer: (A)

RevPAR stands for Revenue Per Available Room. It measures how much revenue each available room generates, taking into account both how many rooms are sold and the rate you’re charging. You can calculate it either by dividing total room revenue by the number of available rooms, or by multiplying the average daily rate by the occupancy rate (as a decimal). This single figure lets you compare hotels of different sizes and track performance over time because it combines rate and occupancy into one metric. It’s different from revenue per occupied room (which ignores unsold rooms) and from average daily rate (which ignores how many rooms are sold). It’s also not a standard metric like occupancy efficiency, which would miss the revenue side entirely.