REVPAR

What is the meaning / definition of REVPAR in the hospitality industry?

REVPAR stands for: Revenue Per Available Room

RevPar is a very classic KPI and regarded as one of the most important financial
calculations for any hotel to see how much revenue they have made within a certain
period of time.

When an analysis is carried out, RevPar figures can be compared to RevPar of the
hotel during the same time frame of the previous years or to its compset.

How do you calculate Revpar?

RevPar Formula: REVPAR = Rooms Revenue / Rooms Available

With RevPAR you can only evaluate your income as a percentage of room sales, not
including any other factors that also take account into making profitability (like
toursales, room service, and spa bookings).

GOPPAR
What is the meaning / definition of GOPPAR in the hospitality industry?

GOPPAR stands for: Gross Operating Profit Per Available Room

It is one of the most effective ways to look at your hotel�s performance and make
adjustments that impact the best interests to achieve the hotel�s goals.

GOPPAR is a KPI that allows hotels to apply the
drill down of the process of Revenue Management
achieving the top line but aligning it with the
ownership perspective, GOPPAR allows you to see
any given time. A hotel is really two assets in
operating business.
laws of economics to a complete
and make adjustments not only on
bottom line as well. From an
what the value of your asset is at
one: a real estate asset and an

How do you calculate GOPPAR?

GOPPAR Formula: GOP (Gross Operatng Profit) / Available Rooms

NREVPAR - Net REVPAR

What is the meaning / definition of NREVPAR or Net REVPAR in the hospitality
industry?

NREVPAR stands for: Net Revenue Per Available Room

NREVPAR metric is similar to RevPAR, except that it factors in the net revenues
(meaning that it accounts for distribution costs, transaction fees and travel
agency commissions).

Compared to REVPAR, NREVPAR removes the "apples to apples" comparison, which is

absolutely necessary for effective measurement of a property's revenue management
strategies. Factoring the cost of distribution into its calculation is a more
transparent performance indicator.

It is undeniably a useful calculation for Revenue Managers and owners to prepare a

strategic planning for the hotel. The problem is that, it is difficult to calculate
all of the many different types of commission, transaction and distribution costs.

How do you calculate NREVPAR?

NREVPAR Formula: (Room Revenue - Distribution Costs) / Available Rooms

-----------------------------------------------------------------------------------
-----------------------------------------

https://www.investopedia.com/terms/r/revpar.asp

What is 'Revenue Per Available Room - RevPAR'

Revenue per available room (RevPAR) is a performance metric used in the hotel
industry. It is calculated by multiplying a hotel's average daily room rate (ADR)
by its occupancy rate. It may also be calculated by dividing a hotel's total room
revenue by the total number of available rooms in the period being measured.

BREAKING DOWN 'Revenue Per Available Room - RevPAR'

RevPAR is used in the hotel industry to make an assessment regarding a hotel's
operations and its ability to fill its available rooms at an average rate.
Increasing a property's RevPAR means that its average room rate or its occupancy
rate are increasing.

An Example of RevPAR
Let's say, for example, that a boutique hotel has a total of 100 rooms, of which
the average occupancy rate is 90%. The average cost for a room is $100 a night.
Using the data provided, a hotel wants to know its RevPAR so it can accurately
assess its performance. The hotel manager can calculate the RevPAR as follows:

($100 per night x 90% occupancy rate) = $90.00

The hotel's RevPAR is therefore $90.00 per day. To find the monthly or quarterly
RevPAR, simply multiply the daily RevPAR by the number of days in the desired
period. This calculation assumes all rooms are at the same price.

The hotel manager can use this daily RevPAR to make key assessments and decisions
regarding the hotel property. He is first able to see how well the hotel is filling
its vacant rooms. It also lets him see how well the average hotel room is priced.
With a $90 RevPAR but a $100 average room, he may be able to reduce the average
rate to $90 to help realize full capacity.

Other Things to Know about RevPAR

RevPAR, although helpful, doesn't take into account the scale of a hotel.
Therefore, if a person is trying to assess two hotel or hospitality properties,
RevPAR alone is not a good measure. This is due to the fact that a hotel may have a
lower RevPAR despite having many more rooms that give it higher revenues.

Additionally, growth in RevPAR does not mean that a hotel's profits are increasing.
This is because RevPAR doesn't use any profitability measures or information on
profits. Focusing solely on RevPAR, therefore, can lead to declines in both revenue
and profitability. Instead, many hotel managers are turning solely to the average
daily rate as a performance measure. This is because price positioning is found to
be one of the main drivers of hotel occupancy. Therefore, if a property is able to
accurately price its rooms, the occupancy rate should increase, and its RevPAR
should also naturally increase.

DEFINITION of 'Condotel'
A condominium project that is operated as a hotel with a registration desk,
cleaning service and more. The units are individually owned. Unit owners also have
the option to place their unit in the hotels rental program where it is rented out
like any other hotel room.

BREAKING DOWN 'Condotel'

There are pros and cons to condotel ownership. Pros include rental income to offset
ownership expenses, a great vacation home, a cared-for home and potential price
appreciation. On the down side, you might have to make a reservation for your own
unit several days or weeks in advance. There are risks associated with all hotel
ownership as well, such as occupancy rates that might be based on general economic
conditions and potential destruction of the property.

Generally, condotels are sold as a second or third home.

Average Daily Rate - ADR + SUBSCRIBE

SHARE

What is an 'Average Daily Rate - ADR'

An average daily rate (ADR) is a metric widely used in the hospitality industry to
indicate the average realized room rental per day. Average daily rate is one of the
key performance indicators (KPI). Other KPIs are metrics such as occupancy rate and
combined with ADR comprise revenue per available room (RevPAR), all of which are
used to measure the operating performance of a lodging unit such as a hotel or
motel.

BREAKING DOWN 'Average Daily Rate - ADR'

The ADR can be measured against a hotel's historical performance. It can also be
used as a measure of relative performance, since the metric can be compared to
other hotels that have similar characteristics such as size, clientele and
location. The formula is room revenue divided by rooms sold.

Hypothetical Example
If a hotel has $50,000 in room revenue and 500 rooms sold, the ADR would be $100.
Rooms used for house use such as those set aside for hotel employees and
complimentary ones are excluded from the calculation.

Using ADR in Practice

Hotel operators seek to increase ADR by focusing on pricing strategies. This
includes upselling, cross-sale promotions and complementary offers such as free
shuttle service to the local airport. The overall economy is a big factor in
setting prices, with hotels and motels seeking to adjust room rates to match
current demand.

The ADR does not tell a complete story about a hotel�s revenue. For instance, it
does not include the charges a lodging may charge if a guest does not show up. The
figure also does not subtract items such as commissions and rebates offered to
customers if there is a problem.

A property�s ADR may increase as a result of price increases. However, this

provides limited information in isolation. Occupancy could have fallen, leaving
overall revenue lower.

Real Life Examples

Marriott International Inc. (NASDAQ: MAR) reports ADR along with occupancy rate and
RevPAR. In 2015, Marriott's ADR increased 4.1% to $152.30. This is on a constant
currency basis, which eliminates the effects of currency translations. Occupancy
was up 0.8% to 73.7%. Taking $152.30 times 73.7% equates to a RevPAR of $112.25,
which is up 5.2% from 2014.

Marriott's management credited overall economic growth, including moderate gross

domestic product (GDP) growth in North America, which improved pricing. In
particular, the company noted strong demand for rooms with higher rates, reducing
the needs for discounting. However, market conditions are monitored, and rooms are
priced daily to try to reflect the current demand.

Hilton Worldwide Holdings Inc. (NYSE) reported ADR rose 3.6% in 2015 to $141.19.
The company's occupancy rate rose 130 basis points to 75.4% Both metrics combined
lead to a RevPAR increase of 5.4% to $106.51.

Revenue Per Occupied Room - RevPOR + SUBSCRIBE

SHARE

DEFINITION of 'Revenue Per Occupied Room - RevPOR'

Revenue per occupied room (RevPOR) is a performance measure for companies in the
hotel and lodging industries. The calculation takes into account the services and
other optional sales that a guest may purchase. RevPor is calculated by dividing
the total revenue by the number of rooms actually being sold to guests:

RevPor=Total Revenue/Occupied Rooms

The time period used can be daily, weekly, monthly or an annual figure depending on
what type of insights the company is looking for. Revenue per occupied room is
meant to show how much profit a hotelier is making from the guest who stay at a
specific property. It can be very useful in evaluating a hotel's performance
through seasonal downtrends. Seasonal visiting trends will drive down other hotel
key performance indicators, but RevPOR ignores the overall number of guests in
favor of measuring how much an average guest spends on the hotel's products and
services. Some hoteliers feel this is a better measure of the management of a hotel
than seasonally influenced occupancy rates.
BREAKING DOWN 'Revenue Per Occupied Room - RevPOR'
Revenue per occupied room takes into account things like room service, dry cleaning
service, tour and spa sales and so on, to show how successful a hotel is in selling
more than just a room to their guests. Other industry metrics rise and fall with
occupancy rates, which may say less about how the hotel is managed and more about
seasonal trends.

RevPOR Versus RevPAR

RevPOR often takes a backseat to revenue per available room (RevPAR), which takes
unoccupied rooms into consideration by multiplying the overall occupancy rate by
the average daily rate (ADR). This is simply because occupancy rates have a far
bigger influence on the bottom line than guest spending on the incidentals. Often
the room is the highest priced part of the transaction, so selling more rooms to
more people translates quickly into more profit. RevPOR will never displace RevPAR
as the main profitability performance measure. Improvements in RevPOR do translate
into higher profits, but the effect is more gradual than the immediate impact of
increasing the occupancy rate.

That said, RevPOR is a better measurement of the direct management of a particular

property than RevPAR. Hoteliers operating networks across the country may handle
marketing and promotions at a level above the individual hotel, so it can be
difficult for the direct managers of the hotel to personally influence occupancy.
What they often do control, is how and when in-hotel purchases are marketed to
guests as well as the quality of those products and services. By focussing on
RevPOR, hotel management can capture more revenue from their guests and soften the
blow of regional or seasonal occupancy declines. More importantly, a good RevPOR in
the down season suggests that total profitability will be even higher when the peak
season arrives.