Calculate Revpar

RevPAR Calculator

function calculateRevPAR() { var totalRoomRevenue = parseFloat(document.getElementById('totalRoomRevenueInput').value); var numberOfRooms = parseFloat(document.getElementById('numberOfRoomsInput').value); var daysInPeriod = parseFloat(document.getElementById('daysInPeriodInput').value); var resultDiv = document.getElementById('revparResult'); if (isNaN(totalRoomRevenue) || isNaN(numberOfRooms) || isNaN(daysInPeriod) || totalRoomRevenue < 0 || numberOfRooms <= 0 || daysInPeriod <= 0) { resultDiv.innerHTML = "Please enter valid positive numbers for all fields."; resultDiv.style.backgroundColor = '#f8d7da'; resultDiv.style.borderColor = '#f5c6cb'; resultDiv.style.color = '#721c24'; return; } var totalAvailableRooms = numberOfRooms * daysInPeriod; var revpar = totalRoomRevenue / totalAvailableRooms; resultDiv.innerHTML = "Your RevPAR is: $" + revpar.toFixed(2) + ""; resultDiv.style.backgroundColor = '#e9f7ef'; resultDiv.style.borderColor = '#d4edda'; resultDiv.style.color = '#155724'; } // Initial calculation on page load for default values window.onload = calculateRevPAR;

Understanding RevPAR: Revenue Per Available Room

RevPAR, or Revenue Per Available Room, is a crucial performance metric in the hospitality industry. It measures the revenue generated per available room in a hotel or lodging establishment over a specific period. Unlike some other metrics, RevPAR considers both the average room rate and the occupancy rate, providing a holistic view of a property's operational efficiency and financial health.

Why is RevPAR Important?

For hotel owners, managers, and investors, RevPAR is indispensable for several reasons:

• Performance Benchmark: It allows hotels to compare their performance against competitors (their comp set) and industry averages.
• Pricing Strategy: A low RevPAR might indicate a need to adjust pricing strategies or improve marketing efforts to boost occupancy.
• Operational Efficiency: It helps identify periods of high or low performance, guiding decisions on staffing, maintenance, and resource allocation.
• Investment Decisions: Investors often use RevPAR to assess the profitability and potential return on investment of a hotel property.
• Revenue Management: It's a key indicator for revenue managers to optimize room rates and maximize overall revenue.

How to Calculate RevPAR

There are two primary ways to calculate RevPAR, both yielding the same result:

1. Method 1: Total Room Revenue / Total Available Rooms

   This method directly uses the total revenue earned from room sales and divides it by the total number of rooms that were available for sale during the same period. The "Total Available Rooms" is calculated by multiplying the number of physical rooms by the number of days in the period.

   RevPAR = Total Room Revenue / (Number of Physical Rooms × Number of Days in Period)

2. Method 2: Average Daily Rate (ADR) × Occupancy Rate

   This method combines two other important metrics. ADR is the average price paid per occupied room, and Occupancy Rate is the percentage of available rooms that were sold.

   RevPAR = ADR × Occupancy Rate

Using the RevPAR Calculator

Our RevPAR calculator simplifies the first method of calculation. Here's how to use it:

1. Total Room Revenue: Enter the total revenue generated exclusively from room sales for your chosen period (e.g., a month, a quarter, a year). Do not include revenue from food and beverage, spa, or other services.
2. Total Number of Physical Rooms: Input the total number of guest rooms your hotel has.
3. Number of Days in the Period: Specify the number of days covered by your "Total Room Revenue" figure. For example, if your revenue is for January, you would enter 31.
4. Click "Calculate RevPAR" to see your result.

Example Calculation

Let's consider a hotel with the following figures for a 30-day month:

• Total Room Revenue: $300,000
• Total Number of Physical Rooms: 100 rooms
• Number of Days in the Period: 30 days

Using the formula:

Total Available Rooms = 100 rooms × 30 days = 3,000 available room nights

RevPAR = $300,000 / 3,000 = $100.00

This means the hotel generated an average of $100 in revenue for every available room night during that month, regardless of whether the room was occupied or not.

By regularly tracking and analyzing your RevPAR, you can gain valuable insights into your hotel's performance and make informed decisions to drive profitability.