Occupancy = rooms sold ÷ rooms available. ADR (average daily rate) = room revenue ÷ rooms sold. RevPAR (revenue per available room) = room revenue ÷ rooms available, which also equals ADR × occupancy. RevPAR is the headline metric because it captures how full you are and how well you are priced in a single figure — a 90%-full hotel selling cheap can earn less per room than a 65%-full one priced well.
The three metrics, with a worked example
Take a 50-room hotel that sold 40 rooms last night for ₹1,60,000 of room revenue.
- Occupancy = rooms sold ÷ rooms available = 40 ÷ 50 = 80%.
- ADR = room revenue ÷ rooms sold = ₹1,60,000 ÷ 40 = ₹4,000.
- RevPAR = room revenue ÷ rooms available = ₹1,60,000 ÷ 50 = ₹3,200.
Notice RevPAR also equals ADR × occupancy = ₹4,000 × 0.80 = ₹3,200. That identity is the whole point — RevPAR folds price and fill into one number.
Why RevPAR beats occupancy on its own
Occupancy alone is a vanity trap. It is easy to hit 95% occupancy — just cut rates until the rooms fill. But a full hotel at a giveaway ADR can earn less per available room than a half-empty one priced with discipline. RevPAR exposes that, because it only rises when you fill rooms and hold rate. Chasing occupancy without watching RevPAR is how hotels stay busy and broke at the same time.
The ADR–occupancy trade-off
Every rate decision trades ADR against occupancy. Drop the rate and occupancy usually rises; hold or raise it and occupancy usually softens. The art of revenue management is finding the point where the two multiply to the highest RevPAR — not the highest occupancy, and not the highest ADR, but the best product of the two. That point moves by season, day of week, and how far out the booking is, which is why static pricing leaves money on the table.
How to actually move RevPAR
Three levers do most of the work:
- Shift the channel mix. A direct booking keeps the 15–25% an OTA would take. Growing direct bookings lifts effective RevPAR even at the same headline rate — the maths is in our room-rate breakeven guide.
- Price dynamically. Move rates with demand — up for high-demand dates, down to fill soft ones — rather than one rate all year.
- Protect rate on peak dates. Do not discount dates that will sell anyway; save the discounting for genuinely soft periods.
RevPAR, ADR & Occupancy Calculator
Calculate Occupancy %, ADR and RevPAR from rooms available, rooms sold and room revenue. The three core hotel revenue KPIs in one place.
Step by step
Calculate all three metrics for any period.
- Calculate occupancy. Divide rooms sold by rooms available for the period.
- Calculate ADR. Divide total room revenue by the number of rooms sold.
- Calculate RevPAR. Divide total room revenue by rooms available — or simply multiply ADR by occupancy.
- Compare and act. Track RevPAR over time and against comparable hotels; adjust price and channel mix to grow it.
Frequently asked questions
What is RevPAR?
RevPAR (revenue per available room) is room revenue divided by the number of available rooms, and it equals ADR multiplied by occupancy. It is the headline hotel metric because it reflects both how full the hotel is and how well its rooms are priced in one figure.
Is high occupancy always good?
Not necessarily. Occupancy can be inflated by cutting rates until rooms fill. A full hotel at a low ADR can earn less per available room than a partly full one priced well. RevPAR is the better measure because it only rises when you fill rooms and hold rate.
What is the difference between ADR and RevPAR?
ADR (average daily rate) is revenue per room actually sold, so it ignores empty rooms. RevPAR is revenue per available room, so it accounts for both price and occupancy. RevPAR equals ADR times occupancy.
Keep reading
Room Rate Breakeven: The Lowest Rate You Can Actually Afford to Sell
How to work out the breakeven room rate for a hotel, why it falls as occupancy rises, and how to set a rate floor that stops OTA discounting from selling rooms at a loss.
GST on Restaurants and Hotels in India: Rates, Input Credit and Common Mistakes
A plain-English guide to GST for restaurants and hotels in India — the 5% vs 18% restaurant rates, hotel room slabs, what “no input tax credit” costs you, and the mistakes to avoid.