What does REVPAR stand for?

REVPAR stands for Revenue per Available Room, which is a key performance metric used in the hospitality and hotel industry to assess a hotel's ability to generate revenue from its available inventory of rooms. This metric is crucial because it captures both occupancy and room rates, providing a more complete picture of a hotel's financial performance.

By calculating REVPAR, hotel managers can evaluate how well their property is performing relative to its capacity. It is derived from dividing total room revenue by the number of available rooms, which accommodates fluctuating occupancy rates and room pricing strategies. Higher REVPAR indicates better performance, suggesting that a hotel is effectively filling its rooms while maximizing rates.

This metric is essential for benchmarking against competitors, tracking financial health over time, and informing pricing and marketing strategies to enhance profitability. Understanding REVPAR helps hospitality professionals make informed decisions that align with broader business goals, illustrating its importance within the industry.