ADR, RevPAR and occupancy: hotel KPIs explained with examples
Occupancy is rooms sold over rooms available, ADR is room revenue over rooms sold, and RevPAR is room revenue over rooms available. Formulas and examples.
Occupancy is the share of available rooms you sold. ADR (average daily rate) is room revenue divided by rooms sold. RevPAR (revenue per available room) is room revenue divided by rooms available, which equals ADR multiplied by occupancy. Together they show whether you are selling enough rooms at the right price.
What are the three core hotel KPIs?
Almost every hotel report starts with the same three numbers. Each one answers a different question:
- Occupancy: how full were we?
- ADR: what did we earn, on average, for each room we sold?
- RevPAR: what did we earn for each room we had to sell, whether it sold or not?
No single number tells the whole story. A hotel can be full at low prices, or charge high prices with half the rooms empty. RevPAR brings price and volume together, which is why owners and revenue managers watch it closely.
The formulas
| KPI | Formula | What it tells you |
|---|---|---|
| Rooms available | Number of rooms x number of nights in the period | Your total stock of room nights |
| Occupancy | Rooms sold / rooms available x 100 | How much of your stock you sold |
| ADR | Room revenue / rooms sold | Average price per sold room night |
| RevPAR | Room revenue / rooms available | Room revenue earned per available room night |
| RevPAR (other method) | ADR x occupancy | Same result as the line above |
| TRevPAR | Total revenue / rooms available | All revenue, not just rooms, per available room night |
| Average length of stay | Room nights sold / number of bookings | How many nights a typical booking lasts |
Two notes. First, “rooms sold” means room nights: one room sold for three nights counts as three. Second, ADR and RevPAR use room revenue only. Taxes, and food, spa or event revenue, are normally left out. That is why TRevPAR exists.
A worked example: one month at a 60-room hotel
Example: a 60-room hotel reviews a 30-day month.
- Rooms available: 60 x 30 = 1,800 room nights
- Rooms sold: 1,350 room nights
- Room revenue (net of taxes): $162,000
- Other revenue (food, drinks, spa): $48,600
- Number of bookings: 540
| KPI | Calculation | Result |
|---|---|---|
| Occupancy | 1,350 / 1,800 x 100 | 75% |
| ADR | 162,000 / 1,350 | $120 |
| RevPAR | 162,000 / 1,800 | $90 |
| RevPAR check | 120 x 0.75 | $90 |
| TRevPAR | (162,000 + 48,600) / 1,800 | $117 |
| Average length of stay | 1,350 / 540 | 2.5 nights |
Examples use US dollars; the same maths works in any currency.
Both RevPAR methods give $90. If your two numbers do not match in your own reports, something in the inputs is wrong, often the count of rooms available or a mix of gross and net revenue.
Why is RevPAR more useful than ADR or occupancy alone?
Look at three ways the same hotel could have run that month. The figures are for illustration only.
| Strategy | Rooms sold | Occupancy | ADR | Room revenue | RevPAR |
|---|---|---|---|---|---|
| A: higher price | 1,170 | 65% | $135 | $157,950 | $87.75 |
| B: base case | 1,350 | 75% | $120 | $162,000 | $90.00 |
| C: lower price | 1,530 | 85% | $108 | $165,240 | $91.80 |
Strategy A has the best ADR but the lowest RevPAR. Strategy C has the lowest ADR but the highest RevPAR and room revenue. Judged on ADR alone, A looks best. Judged on occupancy alone, C looks best. RevPAR shows which one earned more from the rooms you had.
But RevPAR is not the end of the story. Strategy C sold 360 more room nights than A. Each one costs money to clean, staff and supply. Each one may also add breakfast, bar or spa spend. That is why many hotels also track TRevPAR and, where they have cost data, GOPPAR (gross operating profit per available room).
How do you compare your KPIs with other hotels?
Your own numbers tell you how you are doing against last year. To know how you are doing against the market, you need a benchmark: a group of similar hotels nearby, often called a competitive set.
Benchmarking services turn this into index scores. For example, STR’s Average Rate Index (ARI) measures a hotel’s ADR against an aggregated group of hotels, and a score above 100 means more than the expected share. If you do not use a paid service, you can still track published prices of nearby hotels for the same dates and compare them with your own ADR.
Whichever method you use, compare like with like: similar room types, similar locations and the same dates.
What does net ADR mean, and why does channel cost matter?
ADR is normally a gross figure. It does not show what each booking cost you to acquire. Two bookings at $120 are not equal if one came with a commission and the other came direct.
Example: a booking at $120 through a channel that charges a hypothetical 15% commission leaves $102 after commission. The same booking on your own website, with a payment fee and no commission, leaves more. Looking at net ADR by channel shows where your best revenue really comes from. Our guide to OTA commission covers how these costs work.
goDirects has no monthly fee and no setup fee; you pay only on confirmed, paid bookings. When you compare channels, use your actual costs for each one.
How can hotels improve ADR, occupancy and RevPAR?
Each KPI responds to different levers. Use this as a starting checklist:
- Raise occupancy on quiet dates with targeted offers such as last minute or member rates, rather than a blanket price cut. See promotions.
- Protect ADR on busy dates with pricing rules that lift prices as occupancy rises. See dynamic pricing and our dynamic pricing guide.
- Shape length of stay with minimum stay and closed-to-arrival rules so one-night stays do not block longer, more valuable bookings. Read stay restrictions explained.
- Lift spend per guest with meal plans and add-ons, which grow TRevPAR. See add-ons and experiences.
- Move bookings to cheaper channels so more of your ADR stays with you. A strong booking engine on your own domain is the base.
- Set your BAR well as the anchor for every other rate. See best available rate explained.
Common mistakes when calculating hotel KPIs
- Counting rooms, not room nights. A guest staying four nights is four room nights sold.
- Mixing gross and net revenue. Decide whether room revenue is before or after commission, and whether taxes are removed, then use the same rule every month.
- Leaving packages unsplit. If a rate includes breakfast, only the room part belongs in room revenue. Agree a fixed split with your finance team.
- Changing the room count without saying so. Rooms out of order or under renovation change rooms available. Reporting conventions differ, so note how you treat them.
- Comparing different periods. A 31-day month and a 28-day month have different stock. Compare like with like, ideally the same days of the week.
Want to see how your direct channel could lift net ADR? Book a goDirects demo.
Frequently asked questions
What is a good RevPAR for a hotel?
There is no universal good number. RevPAR depends on your location, room type, season and positioning. The useful comparisons are with your own past results for the same period and with a group of similar hotels nearby. A RevPAR that grows year on year while costs stay under control is a healthy sign.
Does ADR include taxes?
In most hotel reporting, no. ADR is usually calculated on room revenue with taxes and fees removed, and without food or other revenue. Whatever rule you choose, apply it the same way every period so trends are reliable. If you report to an owner or a benchmarking service, use their definition.
Can occupancy be over 100%?
On a standard nightly basis it should not be, because you cannot sell more room nights than you have. Some hotels sell day-use rooms and the same room again at night, which can push a raw count above 100%. Most reports track day use separately to keep occupancy meaningful.
Is RevPAR or TRevPAR more important?
Both matter. RevPAR shows how well you sell rooms. TRevPAR adds food, drink, spa and other revenue, which matters most for resorts and hotels with strong outlets. Neither includes costs, so pair them with profit measures such as GOPPAR when you have the data.
How often should I review these KPIs?
Review on-the-books occupancy and ADR for future dates often, daily for the next few weeks in busy periods. Review actual results for past periods weekly and monthly. Forward-looking numbers help you act while there is still time to change prices or restrictions. Past numbers help you learn what worked.