How do you calculate a hotel's occupancy rate, ADR and RevPAR?

Q&A • KPIs

How do you calculate a hotel's occupancy rate, ADR and RevPAR?

Occupancy rate, ADR and RevPAR are the three indicators used to compare any accommodation unit, from a guesthouse to a hotel. All three come from two numbers you already have: how many room-nights were available and how many you sold. Below are the formulas and a full example.

Example: a 20-room guesthouse, a 30-day month

Room-nights available: 20 × 30 = 600. Room-nights sold: 420. Room revenue: €25,200.

The three indicators for the example above

IndicatorCalculationResult
Occupancy rate420 ÷ 600 × 10070%
ADR25,200 ÷ 420€60
RevPAR25,200 ÷ 600 (or 60 × 0.70)€42

How to calculate occupancy for a year

Same formula over the whole period: 20 rooms × 365 nights = 7,300 room-nights available. If you sold 4,380, annual occupancy is 4,380 ÷ 7,300 × 100 = 60%.

Do not average the 12 monthly percentages: months have different numbers of nights, so a simple average is slightly off. Add up the room-nights first, then divide.

Common mistakes

  • Removing out-of-order rooms (renovation, damage) from availability without noting it; the indicator looks better but is not comparable with other periods.
  • Including breakfast, the restaurant or the resort tax in room revenue, which inflates ADR and RevPAR.
  • Counting a night twice when one guest checks out and another checks in on the same day; count nights, not days.
  • Watching only occupancy: 90% at a rate that is too low gives a weaker RevPAR than 70% at the right rate.

How 4Hotel helps

4Hotel calculates occupancy, revenue, ADR and RevPAR directly from the bookings entered in the system and shows them in reports, by period, by sales channel and by room type. You no longer need spreadsheet formulas; the bookings and rooms just have to be up to date.