The average achieved room rate is one of the key figures in the hotel industry. Together with the average room occupancy, can be combined into the so-called RevPar the “Revenue per Available Room”.
You calculate the average room rates as follows:
Method of calculation: NET lodging sales divided by the number of hired out rooms. For example, 80 rooms that were rented out for € 6,800 net lodging turnover per day, amount to a daily average room rate of € 85.00.
The average occupancy / utilization (English “Occupancy Rate” = OR), describes the proportion of rented out rooms. You calculate this key figure as follows:
Method of calculation: OR = total occupied rooms divided by the total rooms available
For example, a hotel has 100 rooms, of which 80 rooms were occupied
Calculation: 80 by 100 = 80%
Result: The hotel has therefore an occupancy rate of 80% on this day.
A key figure of “ARR” has little meaning without the other key figure of the occupancy rate. The average room price of € 200 should be barely economical with 10% of occupancy. Vice versa, 90 % occupancy at an average price of €10.00 for a 3 or 4 star hotel is not sufficient.
A useful combination results from the two key figures, thus, to compare various hotels it only needs this key number, the RevPar that is the revenue per available room:
You calculate the RevPar as follows:
Method of calculation: RevPAR = NET lodgings sales divided by the total number of rooms available.
Example: You make a lodging sale in one day of a NET amount of € 8,500 for 100 available rooms, of which 80 are occupied.
Calculation: 6,800 divided by 100 = € 68.00
Result: The lodgings revenue per available room (RevPar) on this day amounts to € 68.00
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