Revenue Management
RevPAR — Revenue Per Available Room
The reigning master metric of hotel performance — the blended revenue earned per available room, whether it sold or not.
Academic definition
Revenue Per Available Room (RevPAR) is the hotel industry's standard measure of rooms-revenue performance, combining rate and occupancy into a single figure. It is calculated by dividing total room revenue by the number of available rooms over a period, or equivalently by multiplying Average Daily Rate (ADR) by occupancy percentage. Because the denominator is available rather than sold rooms, RevPAR reflects the performance of the entire room inventory, penalising unsold capacity in a way ADR alone does not. Introduced as an advance over rate-only or occupancy-only measures, it enables like-for-like comparison across properties and against a competitive set through the Revenue Generation Index. RevPAR remains the benchmark reported to owners, lenders, and market studies, and underpins most revenue-management decision-making. Its scope is deliberately limited to rooms revenue: it incorporates neither other operating departments nor any cost of generating the revenue.
Room Revenue = total rooms revenue for the period · Available Rooms = total rooms × nights (sold and unsold)
Worked example
A 50-room hotel earns ₹45,00,000 in room revenue over 30 nights — 1,500 available room-nights. RevPAR = ₹45,00,000 ÷ 1,500 = ₹3,000. Two hotels can post this identical RevPAR and bank entirely different profit.
The ProfitPAR™ lens
RevPAR answers "how much revenue did each available room generate?" — and stops exactly where the owner's problem begins. It treats a commission-free direct rupee and an OTA rupee that survived an 18% cut and a discounting promotion as the same rupee. Two hotels can post identical RevPAR while one keeps nearly double the profit, because RevPAR is channel-blind and cost-blind by construction. It is not wrong — it is incomplete for a post-2020 market where cost, not demand, is the binding constraint. ProfitPAR™ keeps RevPAR's available-room discipline but subtracts the six leaks between revenue and retained profit, answering the only question that survives the bank statement: how much did each room actually keep?
RevPAR tells you the room filled. It cannot tell you the room paid.
Measure what each room actually keeps.
ProfitPAR is offered as a private revenue practice, by invitation. Tell us about your hotel to begin.
Request an InvitationWorked examples use illustrative figures in Indian Rupee (₹) with lakh/crore conventions. They are composite and representative, not drawn from any single property. ProfitPAR™ is a trademark of Sibasish Misra.