If you work in the hotel business, acronyms are part of the job. Among the many shorthand terms we use, two are particularly important for measuring performance. Their names might strike a similar chord, but delving into these respective metrics reveals crucial distinctions.
RevPAR and TRevPAR are two of the most frequently used metrics for hoteliers assessing the health of a property or portfolio as well as industry stakeholders measuring the health of market. However, understanding these measurements on their own is only half the battle. True performance insights are unlocked when you understand the fundamental differences between the two and how these metrics complement each other in a comprehensive benchmarking strategy.
What is RevPAR?
RevPAR, or “Revenue Per Available Room,” is the most common key performance indicator (KPI) used in the hotel industry. It provides hoteliers with insight into the top-line financial performance of their rooms division. It also helps identify potential increases or decreases in revenue, irrespective of property size or type. That last piece is why RevPAR is so widely used—the metric can be used to create comparisons across any of the industry’s segments.
How to Calculate RevPAR
You can calculate RevPAR with the following simple formula: