Four measures appear in almost every hotel performance report. Each one answers a different question, and they are most useful read together.
Occupancy
Occupancy is the share of available rooms that were sold. Divide room nights sold by room nights available and multiply by 100. A hotel with 120 rooms that sells 90 on a given night has an occupancy of 75%.
Average daily rate (ADR)
ADR is the average room revenue earned per room sold. Divide room revenue by room nights sold. If those 90 rooms earned 13,500 in room revenue, ADR is 150.
Revenue per available room (RevPAR)
RevPAR is room revenue divided by room nights available. It combines rate and occupancy in one figure. In the example, 13,500 divided by 120 gives a RevPAR of 112.50. RevPAR also equals ADR multiplied by occupancy: 150 multiplied by 0.75 is 112.50.
Gross operating profit per available room (GOPPAR)
GOPPAR is gross operating profit divided by room nights available. Unlike RevPAR it counts all departments and takes operating costs into account, so it shows what the hotel kept, not only what the rooms earned.
Using them together
A rise in occupancy bought with a lower rate can leave RevPAR unchanged. A rise in RevPAR won with higher distribution or labour costs can leave GOPPAR lower. Compare periods of the same length and room revenue on the same accounting basis.
Try the figures in the calculator on the homepage.