A hotel multiplies its occupancy rate by its average daily rate and obtains a single performance figure. That figure is revenue per available room, commonly called RevPAR. It shows how effectively the property turns its room inventory into revenue.

RevPAR allows comparison across properties of different sizes because it accounts for unsold rooms. Rising RevPAR can come from higher occupancy, higher rates, or both. Managers use it alongside cost data to judge operational health. Market RevPAR comparisons reveal competitive position.

The metric does not capture food-and-beverage or other ancillary revenue, so total revenue measures are used as complements. Still, for the lodging core of the business, RevPAR remains a standard benchmark. Investors and operators watch it closely when assessing strategy and results.

Empty rooms drag RevPAR down; strong pricing power lifts it.