Owners often track ADR alone. RevPAR is what tells you whether the property as a whole is performing.
The formulas
ADR = room revenue divided by rooms sold. RevPAR = room revenue divided by rooms available, which is the same as ADR multiplied by occupancy.
A worked example
A 40-room property selling 20 rooms at an average of 6,000 has an ADR of 6,000 and a RevPAR of 3,000. Selling 30 rooms at 4,500 gives a lower ADR of 4,500 but a higher RevPAR of 3,375. The second night earns more even though the headline rate looks worse.
How to use them together
Use ADR to protect positioning and rate integrity. Use RevPAR to judge whether a pricing decision actually worked. Watch both against the same period last year rather than against budget alone.
Read more about our Hotel Revenue Management Services.
Get Free Hotel Revenue Audit