RevPAR, ADR and price per key calculator

What RevPAR measures

Revenue per available room combines the two numbers a hotel controls every night: how many rooms it fills and what it charges for them. A hotel can raise occupancy by cutting rates or raise ADR by accepting more empty rooms; RevPAR shows whether the trade-off increased rooms revenue. Because it is calculated per available room, it lets buyers compare hotels of different sizes.

RevPAR covers rooms revenue only. Food and beverage, meeting rooms, parking and other departments are left out, which is why full-service hotels are also compared on total revenue per available room. RevPAR also says nothing about costs: two hotels with the same RevPAR can have very different NOI.

ADR, occupancy and the period

Average daily rate is rooms revenue divided by rooms sold, and occupancy is rooms sold divided by rooms available. Use the same period for both, and say what it is: a trailing twelve months, a calendar year or a single month. Seasonal properties such as resorts and roadside motels can show very different figures by month, so an annual average should be read next to the monthly pattern.

Check how rooms available is counted. Rooms out of order for a renovation, or a hotel that closes for part of the year, change the denominator, and buyers will ask whether the figures use every key for every night.

Price per key, cap rate and rooms revenue multiple

Hotel buyers compare prices per key (per guest room) the way apartment buyers compare price per unit, and read it next to the hotel's class, brand, condition and RevPAR. The cap rate relates the price to NOI; state whether the NOI is before or after a reserve for furniture, fixtures and equipment (FF&E) and which period it covers. A multiple of rooms revenue is a rough screen that ignores costs and other departments.

Arithmetic only. This is not an appraisal, a valuation opinion, or financial, legal or tax advice. Hotel values depend on the brand and franchise terms, management, required capital work and the market, which no calculator captures.

Presenting hotel performance in an OM

Show occupancy, ADR and RevPAR for several years with their periods, and label any figure you calculated. In an OfferingStack offering memorandum the Hotel Performance page shows the key count, occupancy, ADR and RevPAR (calculated as ADR × occupancy and labelled when you don't enter it), up to six operating years with the RevPAR change across them, meeting space, the FF&E reserve, the flag and nearby lodging from the location data.