How to Calculate RevPAR, ADR and Occupancy Rate

There are three numbers the whole hotel industry talks in — occupancy rate, ADR and RevPAR — and they can sound rather more forbidding than they are. All three are one division each. If you can work out an average, you can work out all of them, and you can do it on the back of a bill.

This guide takes them one at a time, with the arithmetic written out in full, and finishes with the part that actually matters: what the three of them are telling you when you read them together.

The three numbers at a glance

Number	The question it answers	Formula
Occupancy rate	How full were we?	Rooms sold ÷ rooms available
ADR (average daily rate)	What did a sold room fetch?	Room revenue ÷ rooms sold
RevPAR (revenue per available room)	What did every room earn, full or not?	Room revenue ÷ rooms available

Notice how similar ADR and RevPAR look. The only difference is the bottom half: ADR divides by the rooms you sold, RevPAR divides by all the rooms you had. That one small change is why the pair of them is so much more useful than either alone.

Throughout, we'll use one imaginary property: 24 rooms, and one ordinary Tuesday night on which 18 of them were occupied and the rooms brought in ₹73,800. The currency doesn't matter — the arithmetic is identical in dollars, euros or baht.

1. Occupancy rate

Occupancy rate = rooms sold ÷ rooms available × 100

For our Tuesday:

18 ÷ 24 = 0.75 → 75% occupancy

That's the whole calculation. The only thing worth pausing on is what goes into "rooms available".

• Over more than one night, count room-nights. Twenty-four rooms across a 30-night month is 24 × 30 = 720 available room-nights. If you sold 486 of them, occupancy for the month is 486 ÷ 720 = 67.5%.
• Rooms out of order — under renovation, flooded, held for staff — are conventionally left in the count. They're still rooms you aren't earning from, and keeping the denominator steady is what makes March comparable to April.
• Complimentary and house-use rooms are usually counted as sold (they were occupied, after all) but contributed no revenue, which drags ADR down a little. Some properties exclude them instead. Either is defensible; drifting between the two is not.

2. ADR — average daily rate

ADR = room revenue ÷ rooms sold

Same Tuesday:

₹73,800 ÷ 18 rooms = ₹4,100 ADR

So the average room that night went for ₹4,100. Three things to keep out of that top number:

• Tax. Use net room revenue, before GST or VAT. Otherwise your ADR moves when the tax rate moves, which tells you nothing about your pricing.
• Food, bar and room service. ADR is a measure of the room. Breakfast bundled into a package is a judgement call — many properties strip it out and credit it to F&B — but whatever you decide, decide it once.
• Anything that isn't a room. Laundry, airport pickups, event-space hire and late-checkout fees all belong elsewhere.

ADR has one famous blind spot, and it's worth seeing plainly: a 24-room hotel that sells one suite for ₹12,000 and nothing else has an ADR of ₹12,000. Magnificent number. Nearly empty hotel. Which brings us neatly to the third one.

3. RevPAR — revenue per available room

RevPAR = room revenue ÷ rooms available

₹73,800 ÷ 24 rooms = ₹3,075 RevPAR

RevPAR spreads the night's takings across every room in the building, including the six that sat empty. That's what makes it the number owners and investors reach for first — it can't be flattered by an empty hotel with one good booking.

There's a second route to the same answer, and it's often quicker because you usually have both figures already:

RevPAR = ADR × occupancy rate

₹4,100 × 0.75 = ₹3,075

Same answer, as it must be. If your two routes ever disagree, something has slipped into one calculation and not the other — nearly always tax, or a different room count.

A worked month, start to finish

Our 24-room property, across a 30-night month:

Step	Working	Result
Available room-nights	24 rooms × 30 nights	720
Rooms sold	counted from the bookings	486
Occupancy	486 ÷ 720	67.5%
Net room revenue	before tax, rooms only	₹2,041,200
ADR	₹2,041,200 ÷ 486	₹4,200
RevPAR	₹2,041,200 ÷ 720	₹2,835
RevPAR, the other way	₹4,200 × 0.675	₹2,835 ✓

Twenty minutes with a calculator, once you've counted the room-nights. Which is rather the point of letting software do it.

Reading the three together

Any one of them on its own can mislead you. Together they're rather eloquent. Here are two months at the same property:

	Occupancy	ADR	RevPAR
March	85%	₹3,200	₹2,720
April	62%	₹4,600	₹2,852

March looks like the better month — the hotel was visibly busy, the corridors were full. April earned more per room. The extra 23 points of occupancy in March were bought with discounting, and they didn't quite pay for themselves. More laundry, more breakfasts, more housekeeping hours, slightly less money.

That's the conversation the three numbers exist to start:

• High occupancy, low ADR — you may be selling too cheaply, or too early. Try holding rates a little longer before the discount.
• Low occupancy, high ADR — you're leaving rooms empty that would have sold at a softer rate. Look at midweek and shoulder season.
• Both rising — enjoy it, and raise rates.
• RevPAR flat while occupancy climbs — you're working harder for the same money.

Two cousins you'll hear mentioned

Neither is needed to run a small property, but they come up:

• TRevPAR — total revenue per available room. Same denominator, but the top includes restaurant, bar, spa and everything else. Useful when the restaurant is a real business in its own right rather than a breakfast room.
• GOPPAR — gross operating profit per available room. RevPAR after costs. The honest one, and the hardest to calculate, because it needs your expenses recorded as carefully as your revenue.

Five ways these numbers quietly go wrong

1. Tax left in the revenue. The most common one. ADR and RevPAR both inflate, and a change in tax rate looks like a change in performance.
2. F&B left in the revenue. A good month in the restaurant reads as a good month at the front desk.
3. A room count that drifts. Rooms taken out for renovation one month and put back the next, without a note, makes a year impossible to read.
4. Comparing across different definitions. Your figures and the OTA's dashboard figures will rarely match exactly, because they count different things. Compare like with like, or compare only against yourself.
5. Counting bookings instead of room-nights. One booking for four nights is four room-nights. Getting this wrong makes long-stay properties look far emptier than they are.

Let the system do the arithmetic

None of this is hard, but it is fiddly, and it has to be redone every single day. If your bookings and bills already live in one place, the three numbers are simply there.

In Zitlin, the occupancy report for any date shows total rooms, rooms occupied, occupancy, check-ins, check-outs, continuing stays, guests in house, reservations created, and ADR and RevPAR — plus the nightly postings underneath, guest by guest and room by room, so you can see exactly which prices the averages were built from. It opens on the screen, and it prints to a PDF for anyone who wants to take it away.

• Reports and analytics — occupancy, revenue against expenses, channel mix by OTA, and a revenue summary emailed each morning around 5 AM.
• Night audit — closing the day writes a permanent snapshot of the same figures, so last March can't be quietly rewritten.
• Rate plans and discounts — where the ADR half of the equation is actually decided.
• Commission-free direct bookings — the quickest way to lift RevPAR without touching occupancy, since nothing comes off the top.

Frequently asked questions

What is the RevPAR formula? Room revenue ÷ available room-nights. Or, equivalently, ADR × occupancy rate — the two always agree, so use whichever numbers you already have.

How do I calculate occupancy rate? Rooms sold ÷ rooms available, as a percentage. Over more than one night, multiply rooms by nights first: 24 rooms over 30 nights is 720 available room-nights.

What does ADR mean in a hotel? Average daily rate — the average price your sold rooms went for. Room revenue ÷ rooms sold. Because it ignores empty rooms, it can look wonderful on a quiet night.

What is the difference between ADR and RevPAR? ADR divides by the rooms you sold; RevPAR divides by every room you had. ADR is always higher unless you're completely full.

Should tax and breakfast be included in the ADR calculation? Tax, no — use net room revenue. Breakfast and other food are usually excluded too, so ADR stays a measure of the room. Above all, pick one definition and keep it.

Do I count rooms that are out of order? Convention keeps them in the denominator — a room under renovation is still a room earning nothing. Either choice works, as long as it's the same choice every month.

What is a good RevPAR? There's no universal figure; it depends entirely on market, season and currency. Compare your property against itself — this month against the same month last year.

Does Zitlin calculate RevPAR and ADR automatically? Yes — the occupancy report shows occupancy, ADR and RevPAR for any date, with the nightly postings behind them. It's part of Zitlin Pro, free for your first 60 days.