RevPAR (Revenue Per Available Room)
RevPAR, or Revenue Per Available Room, is the primary performance metric for hotel operators, calculated by multiplying occupancy rate by the average daily rate, and it captures how effectively a hotel is filling its room inventory at profitable price points.
RevPAR is the hotel industry's equivalent of a revenue intensity metric — it measures how much revenue a hotel generates per unit of capacity regardless of whether that capacity is occupied. A hotel with 200 rooms that is 80% occupied at an average daily rate of $200 generates a RevPAR of $160, because each of its 200 available rooms generates $160 in revenue on average across the period.
The metric matters because it combines the two levers hoteliers control: price and occupancy. A hotel can boost its RevPAR by raising rates (assuming demand is not destroyed), by filling more rooms, or ideally by improving both. The challenge is that these levers often trade off against each other — a dramatic rate increase may boost average daily rate while pushing occupancy down, potentially lowering RevPAR if the demand response is strong.
Marriott International, the world's largest hotel company by number of properties, reports RevPAR on a comparable and constant currency basis as its primary financial performance indicator. Comparable RevPAR excludes hotels that were not open for the full comparison period, paralleling the same-store sales concept in retail. During earnings calls, Marriott provides RevPAR growth by geography — North America, international, Greater China — because travel demand dynamics vary significantly by region.
RevPAR analysis during the COVID-19 pandemic illustrated the metric's sensitivity to catastrophic demand destruction. In 2020, RevPAR at major hotel chains fell 50% to 70% as travel collapsed. The subsequent recovery showed how RevPAR can overshoot historical levels when demand returns faster than supply recovers — both because some hotels remained closed for extended periods and because surviving hoteliers faced little competitive pressure to discount aggressively.
Investors in hotel REITs and hotel operating companies use RevPAR relative to the industry baseline — expressed as RevPAR index — to assess whether a property is capturing more or less than its fair share of available market demand. A RevPAR index above 100 means the property is outperforming its competitive set on a per-available-room basis. Sustained index improvement suggests genuine competitive advantage in location, brand quality, loyalty program strength, or revenue management capability.
RevPAR is complemented by Total RevPAR, which includes food and beverage revenue, meeting and event revenue, parking, and other ancillary streams. For full-service luxury hotels, non-room revenue can represent 40% or more of total revenue, making Total RevPAR a more complete measure of asset productivity.