What Is RevPAR?

By Matthew DiLallo – Updated Nov 10, 2025 at 12:19 AM EST

Key Points

RevPAR is calculated by multiplying average room rate by occupancy rate or dividing total room revenue by available rooms.
An increase in RevPAR indicates improved hotel performance; a decrease suggests profitability issues.
RevPAR informs pricing strategies, helping hotels decide to either raise room rates or increase occupancy.

A key performance metric for the hospitality industry is a property's revenue per available room, or RevPAR. It helps gauge the overall performance of a hospitality property like a hotel by measuring how much revenue each room produces per night. Because of that, it's an important metric for commercial real estate investors who own hospitality properties like hotels as well as real estate investment trusts (REITs) focused on hospitality.

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Rear view of tourist in the hotel room pulling the curtains to see the view — Source: Getty images

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Revenue

Revenue is a business’s gross income or the amount of money it brings in from regular operations before costs are considered.

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About the Author

Matt DiLallo has been a contributing Motley Fool stock market analyst specializing in covering dividend-paying companies, particularly in the energy and REIT sectors, since 2012. He also covers pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.

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