Youtube Video

Summary published at 10/19/2024

👋 Revenue per Available Room (RevPAR) is a key metric for hotels to assess capacity utilization.

🏨 In our example, the hotel has 35 rooms, but 1 room is out of commission, leaving 34 available rooms.

💰 The hotel charges different rates:

  • $95 for a luxury room
  • $90 as the rack rate
  • $85 for a discount
  • $70 for a promotion
The total revenue from these rooms is $1,990.

📊 The occupancy percentage is calculated by dividing the 23 occupied rooms by the 34 available rooms, resulting in an occupancy rate of 68%.

📈 The Average Daily Rate (ADR) is calculated by dividing the total revenue of $1,990 by the 23 rooms sold, giving an ADR of $87.

🔍 RevPAR is calculated by multiplying the ADR by the occupancy rate: $87 (ADR) * 68% (occupancy) = $59.60 (RevPAR).

🙏 I hope this has been helpful! Thank you!

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