ADR, Occupancy Rate, RevPar, ARPar
Terms in this set (5)
ADR (average daily rate)
total room revenue / # occupied rooms
# rooms occupied / total rooms
RevPar (revenue per available room)
occupancy rate x ADR
total room revenue / total rooms
ARPar (Adjusted RevPar)
(ADR-Variable costs per occ. room + additional revenue per occupied room) x occupancy %
Why is RevPar not an accurate description of a hotels performance or profitability?
It doesn't take into account the costs per occupied room. So a hotel with the same RevPar as another hotel don't really have the same profit if there occupancies are different because it costs more for the hotel with more rooms sold. Thus, the hotel with less rooms and the same RevPar is more profitable.
It also doesn't take into account the additional revenue per room from restaurant, casino, etc.