Occupancy rate, ADR and RevPAR
Definition : Occupancy rate is the share of nights sold, ADR the average price of a night sold, and RevPAR the revenue per available night (ADR × occupancy).
Three indicators are enough to tell whether your business is doing well: occupancy rate, average daily rate (ADR) and RevPAR. They apply as much to a hotel as to a riad or a set of apartments.
The three formulas
- Occupancy rate = nights sold ÷ nights available × 100
- ADR (average daily rate) = room revenue ÷ nights sold
- RevPAR (revenue per available room) = room revenue ÷ nights available, which is ADR × occupancy rate
A worked example (fictional)
Ten units over 30 days offer 300 available nights. If 180 are sold, occupancy is 60%. With 270,000 MAD of room revenue, ADR is 1,500 MAD (270,000 ÷ 180) and RevPAR is 900 MAD (270,000 ÷ 300, or 1,500 × 0.6).
Reading them together
High occupancy with a low ADR may mean your prices are too low. A high ADR with low occupancy, prices too high or too little visibility. RevPAR combines both: it is the figure to compare from month to month, or unit to unit.
Pitfalls
- Decide whether closed nights (works, personal use) count as available: what matters is keeping the same rule over time
- Comparing figures excluding tax with figures including tax
- Forgetting that platform commissions reduce the revenue you actually collect
- Mixing units of very different sizes without analysing them separately
Your figures in Hosteo
Hosteo’s Finance module calculates revenue per night, occupancy rate and average price, tracks collections, pending balances and city tax, and sorts expenses by category to show the monthly result per property.
- Revenue calculated per night
- Collections and pending balances
- Expenses by category and monthly result per property
Frequently asked questions
What is the difference between ADR and RevPAR?
ADR only looks at nights sold; RevPAR relates revenue to all available nights, sold or not. It therefore takes occupancy into account.
What is a good occupancy rate?
It depends on the city, the season and the type of business: there is no universal figure. Compare yourself with yourself first, month after month.
Are taxes included in revenue?
Use a consistent basis, usually excluding taxes, so your months are comparable.
Can I calculate these without software?
Yes, with a spreadsheet, but it means retyping bookings. A PMS calculates them from the calendar.
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General information, as of the publication date.
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