Occupancy, ADR and RevPAR Explained, With Examples

Short answer

Occupancy rate = rooms sold ÷ rooms available × 100. ADR (average daily rate) = room revenue ÷ rooms sold. RevPAR (revenue per available room) = room revenue ÷ rooms available, which is also occupancy × ADR. Occupancy says how full you were, ADR how much you charged, and RevPAR combines both into one number for room revenue.

The three numbers

Measure	Formula	Answers
Occupancy rate	Rooms sold ÷ rooms available × 100	How full were we?
ADR	Room revenue ÷ rooms sold	What price did we get per sold room?
RevPAR	Room revenue ÷ rooms available (= occupancy × ADR)	How much did each room we have earn?

Rooms available are the rooms you could sell that night: total rooms minus rooms out of order. Rooms sold are occupied paying rooms; decide once whether complimentary and staff rooms count, and keep the rule. Room revenue is the room charge only, excluding VAT and excluding meals, bar and extras, even when the rate includes breakfast.

Worked example: one night

Input	Value
Rooms in the hotel	40
Out of order	2
Rooms available	38
Rooms sold	30
Room revenue (excluding VAT and meals)	KSh 255,000

Measure	Calculation	Result
Occupancy	30 ÷ 38 × 100	78.9%
ADR	255,000 ÷ 30	KSh 8,500
RevPAR	255,000 ÷ 38 (or 78.9% × 8,500)	KSh 6,711

Over a month

For a period, add up rooms available, rooms sold and room revenue for every night, then apply the same formulas. Don't average the nightly percentages: a quiet Monday and a full Saturday don't weigh the same.

Rate vs occupancy

RevPAR is useful because it shows the trade-off between price and volume. Dropping the rate from KSh 8,500 to KSh 7,000 and filling 36 rooms instead of 30 gives room revenue of KSh 252,000 and a RevPAR of KSh 6,632: busier, but slightly worse for room revenue, and with more cleaning, laundry and amenities to pay for. That last point is why RevPAR alone isn't enough.

Read cost beside revenue

Measure	Formula	Why
Cost per occupied room (CPOR)	Rooms department costs ÷ rooms sold	What each sold room cost to service.
GOPPAR	Gross operating profit ÷ rooms available	Profit, not just revenue, per room you have.
TRevPAR	Total revenue (rooms, F&B, other) ÷ rooms available	The whole property's earning power per room.

See cost per occupied room for a worked example.

What good looks like

There is no universal "good" occupancy or ADR: it depends on location, season, segment and size. Compare yourself with the same month last year, with your budget, and with similar properties nearby if you can get the figures. Trends matter more than single nights.

Track occupancy, ADR and RevPAR every night, and by month
Compare with the same period last year, not just last month
Read RevPAR together with cost per occupied room
Split by segment (direct, agents, online) to see where rate is lost

In Tivuzo

The night audit records rooms sold, occupancy, ADR, RevPAR and room revenue for every business date, and the accounts hold the costs, so CPOR and GOPPAR can be read beside them. Learn what the audit does in what is a night audit.

Hotel KPI questions

What is a good occupancy rate for a hotel?

It depends on the market and season. Many independent hotels plan around 60–75% over a year, with peaks near 100% and quiet months far lower. Compare with your own history and budget.

Is ADR calculated with or without VAT?

Without. Use room revenue net of VAT and without meals, bar or extras.

Should complimentary rooms count in occupancy?

Choose one rule and keep it. Many hotels count complimentary rooms as occupied but exclude them from ADR, since they earn nothing.

What is the difference between RevPAR and ADR?

ADR divides room revenue by rooms sold; RevPAR divides it by rooms available. RevPAR falls when rooms sit empty; ADR doesn't.