Here is hotel RevPAR, ADR and occupancy explained in one breath: occupancy is how full you were, ADR is the average price you got for each room you sold, and RevPAR is the two multiplied together — revenue earned for every room you could have sold. Occupancy on its own can be bought with discounts. ADR on its own can be protected by selling almost nothing. RevPAR is where the two meet, and it is the number owners, lenders and brand partners look at first.
This guide walks through all three with one worked example — a 40-room property across a full month — then shows what the numbers quietly hide, and finishes with a weekly reporting routine a two-person front office team can actually run.
The three numbers every hotelier is judged on
If a lender, an investor or a prospective buyer asks how the hotel is performing, they will ask for these three. Internally they do a different job: they tell you whether last week's decisions worked. Did dropping the weekday rate actually fill rooms, or did you simply sell the same rooms cheaper?
The relationship is simple. Occupancy and ADR pull against each other. Push rate up and occupancy usually softens; cut rate and occupancy usually climbs. RevPAR tells you whether the trade was worth making. That is why it is the fairest single number for comparing one month, one season or one year to another.
Benchmarks are context, not targets
Published benchmark figures for occupancy, ADR and RevPAR vary enormously by market, season, star rating and property type — a city-centre boutique and a seasonal beach lodge have almost nothing in common. Before comparing yourself to anyone else, compare yourself to your own trailing twelve months.
Occupancy rate: how full you actually were
Occupancy = rooms sold ÷ rooms available × 100.
The formula is easy. The definitions are where small hotels go wrong. "Rooms available" can mean every physical room in the building, or it can exclude rooms that were out of order for refurbishment or damage. Both are defensible. What is not defensible is switching between them, because your year-on-year comparison stops meaning anything.
Comps, house use and day-use
Complimentary rooms and house-use rooms are occupied but earn nothing. Most operators count them in rooms sold for occupancy, then exclude them from ADR. Day-use bookings — a room sold for six daytime hours — distort both metrics if counted as full room nights. Pick a rule, write it down, and apply it every month.
Worked example: a 40-room property, 30-day month
- Physical inventory: 40 rooms × 30 nights = 1,200 room nights available
- Two rooms out of order for 15 nights = 30 room nights lost
- Total room nights occupied: 858, of which 18 were complimentary or house use
- Occupancy on full inventory: 858 ÷ 1,200 = 71.5%
- Occupancy excluding out-of-order rooms: 858 ÷ 1,170 = 73.3%
Two legitimate answers, nearly two points apart. We will use the full-inventory figure of 71.5% for the rest of this article.
One last warning: consistently high occupancy is not automatically good news. If you are at 95% every weekend and turning people away, you are almost certainly underpriced. Occupancy that never drops is a pricing signal, not a trophy.
ADR: what you earned per room sold
ADR = room revenue ÷ rooms sold.
Room revenue means room revenue only. Exclude restaurant and bar, spa treatments, laundry charges, parking, extra-bed fees billed separately, and all taxes. If you fold ancillary spend into ADR you will flatter the number and lose the ability to see what your rooms are genuinely worth.
Continuing the example, and using plain currency units so the arithmetic travels: 840 revenue-generating room nights produced 79,800 in room revenue. ADR = 79,800 ÷ 840 = 95.00.
Gross versus net ADR
That 95.00 is gross. Suppose 252 of those nights came through OTAs at an average 15% commission. Commission on 23,940 of OTA revenue is 3,591. Net room revenue becomes 76,209 and net ADR falls to 90.72 — nearly 4.5% lower. Track both. Gross ADR tells you about positioning and guest willingness to pay; net ADR tells you what reaches the bank.
Group blocks deserve the same scrutiny. A single 40-night block at half your usual rate drags the whole month's ADR down more than most managers expect, because ADR is an average weighted by volume, not a list price.
RevPAR: the metric that combines both
Two formulas, one answer:
- RevPAR = ADR × occupancy (paid occupancy, to stay consistent)
- RevPAR = room revenue ÷ rooms available
In our example, 840 paid nights ÷ 1,200 available = 70% paid occupancy. RevPAR = 95.00 × 0.70 = 66.50. Cross-check: 79,800 ÷ 1,200 = 66.50. If your two methods disagree, you have mixed paid and complimentary nights somewhere.
Same RevPAR, very different business
This is the point most articles skip. Two months can deliver almost identical RevPAR and feel completely different on the ground. Assume a variable cost of 22 per occupied room — housekeeping labour, laundry, amenities, utilities, in-room consumables.
| Measure | Scenario A: high occupancy | Scenario B: high rate |
|---|---|---|
| Occupancy | 85% | 60% |
| ADR | 78.00 | 110.00 |
| Rooms sold (of 1,200) | 1,020 | 720 |
| Room revenue | 79,560 | 79,200 |
| RevPAR | 66.30 | 66.00 |
| Variable cost at 22/room | 22,440 | 15,840 |
| Contribution after variable cost | 57,120 | 63,360 |
RevPAR is effectively tied. Contribution is not: Scenario B keeps roughly 6,240 more, with 300 fewer rooms to clean, less wear on linen and lifts, and a quieter breakfast service. RevPAR is a revenue metric, not a profit metric. That is why the rate-led route usually wins when demand allows it.
If you buy market data, a RevPAR index against a competitive set is useful. If you do not, your own trailing twelve months is a perfectly good sanity check — and it is free.
What these three metrics hide
- Cost per occupied room. Nothing in RevPAR tells you what it costs to deliver the night you just sold.
- Distribution cost. Commission, payment processing fees, loyalty discounts and OTA promotions all sit outside the headline number.
- Ancillary revenue. A property with a busy restaurant, spa or events calendar can have modest RevPAR and strong total revenue.
- Length of stay and channel mix. Thirty one-night direct bookings and ten three-night OTA bookings can produce identical RevPAR with very different workload and margin.
- Dirty data. Unposted charges, no-shows never billed, rooms sold but not closed out at night audit — every one of these quietly understates ADR and RevPAR.
Check the data before you change the strategy
Before you spend a week analysing a RevPAR dip, check whether the dip is real. Run the night audit discipline first: unposted folios and missed no-show charges are the most common cause of a month that looks worse than it was.
The next level: TRevPAR, NRevPAR and GOPPAR
Once RevPAR is reliable, three further metrics close the gaps above.
| Metric | Formula | Best for |
|---|---|---|
| TRevPAR | Total revenue ÷ rooms available | Resorts, properties with F&B, spa or events |
| NRevPAR | Room revenue minus distribution cost ÷ rooms available | Properties with a high OTA share |
| GOPPAR | Gross operating profit ÷ rooms available | Owners, lenders and valuation conversations |
In our 40-room month, if total revenue including restaurant, bar and spa reached 112,000, TRevPAR is 93.33 against a RevPAR of 66.50 — a third of the business is invisible in RevPAR alone. Net of the 3,591 commission, NRevPAR is 63.51. And if gross operating profit came in at 34,000, GOPPAR is 28.33.
When should a small property graduate? Add TRevPAR as soon as non-room revenue passes roughly a fifth of the total. Add NRevPAR when OTAs carry a meaningful share of your nights. Add GOPPAR when you are reporting to an owner, a bank or a board.
How to pull these numbers without spreadsheets
Every metric on this page rests on one nightly habit: a clean night audit. Roll the business date, post room and tax charges, resolve no-shows and leave no room in an ambiguous status. Skip it for a week and your month-end figures become a reconstruction exercise.
After that, the goal is to stop re-typing. A property management system already holds the reservations, the rates, the folios and the room status, so it can calculate occupancy, ADR and RevPAR from live data rather than from an export someone pasted into a workbook.
In Stay Quora, reservations, front desk, billing, night audit, revenue management and the analytics add-ons sit in the same system, so the occupancy figure on the dashboard is built from the same records the front desk is working in. Channel management keeps OTA and direct bookings in one inventory picture, which is what makes gross-versus-net ADR comparisons possible. Role-based access control and the activity log mean rate overrides, comps and house-use rooms are traceable to a person and a timestamp — useful when a month looks odd and nobody remembers why.
Two refinements worth building in early. First, segment the numbers — by rate plan, market segment and channel — so you can see what moved RevPAR rather than just that it moved. Second, add pace and pickup reports, which are simply forward-looking versions of the same metrics: on-the-books occupancy and ADR for a future date, compared to the same point last year.
Reporting fields and API details are covered in the Stay Quora documentation, and the free ROI calculator and plan finder on the tools page are a reasonable way to sanity-check whether moving off spreadsheets is worth it for your size of property.
A weekly routine a small team can run
Metrics only earn their keep if someone looks at them on a schedule. This takes well under an hour a week.
- Monday, 20 minutes. Last week's occupancy, ADR and RevPAR against the same week last year and against forecast. Note the single biggest driver of any variance.
- Wednesday, 20 minutes. Pickup for the next 30 and 90 days. Flag any date tracking materially behind last year and decide on it this week, not next month.
- Friday, 5 minutes. Confirm the weekend's rates and restrictions are live on every channel and the direct booking engine.
- Month end, 45 minutes. Segment and channel mix, gross versus net ADR, TRevPAR if you have meaningful non-room revenue, and a look at comps and house-use volume.
Before changing any rate, ask three questions. Is the data clean — has the night audit run every night this period? Is this a demand problem or a visibility problem, since a discount will not fix rooms nobody can find? And what happens to contribution, not just revenue, if the change works exactly as intended?
Start with one report, not six
If you only take one habit from this article, make it the Monday comparison against the same week last year. Year-on-year beats month-on-month for seasonal properties, and it takes less time than the weekly staff rota.
From here, the hotel revenue management guide covers forecasting and rate strategy in depth, the guide to increasing hotel direct bookings tackles the commission side of net ADR, and the hotel channel manager guide explains keeping inventory consistent across OTAs. If you are weighing up systems, the complete guide to hotel PMS platforms and the boutique hotels solutions page are the right next stops, and plan details are on the pricing page — a free trial starts without a credit card.