HOTELS GUIDE
Hotel ADR vs RevPAR
ADR measures room rate on occupied rooms, while RevPAR measures room revenue across all available rooms.
In this guideWhat the analysis measuresCalculation frameworkUnderwriting reviewHow to use the result
What the analysis measures
ADR equals room revenue divided by rooms sold. RevPAR equals room revenue divided by available rooms, or ADR multiplied by occupancy.
Calculation framework
A hotel can raise ADR while losing enough occupancy for RevPAR to decline. Review both metrics rather than treating rate growth as revenue growth.
Underwriting review
Keep taxes, resort fees, complimentary rooms and out-of-order inventory consistent across periods and comparable hotels.
How to use the result
Use RevPAR to build room revenue, then add other departments and deduct operating costs. Neither metric measures profitability by itself.