What does RevPar stand for in the hospitality industry?

RevPar stands for Revenue per Available Room and is a key performance metric used in the hospitality industry to evaluate a hotel’s ability to generate revenue from its available rooms. It is calculated by dividing the total room revenue by the number of available rooms, regardless of whether they were sold. This measure provides insights into pricing strategy and overall financial performance, helping hotel managers make informed decisions regarding room pricing, occupancy levels, and revenue management strategies.

For hotels, an increase in RevPar indicates improved financial health, reflecting either higher occupancy rates or increased average daily rates (ADR). It serves as a crucial benchmark for assessing operational efficiency and competitiveness, allowing for informed comparisons among different hotels or market segments. The other options do not accurately reflect the defined terms or metrics used in the industry, reinforcing the importance of understanding RevPar as a fundamental concept in hospitality finance.