Three numbers decide whether a hotel is doing well: ADR, occupancy and RevPAR. Big chains live by them; most small and boutique owners only half-track them. Once you understand how they connect, you can spot exactly where money is leaking. Here they are in plain language, with rupee examples.
ADR, Average Daily Rate
ADR = room revenue ÷ rooms sold. It is the average price you actually got per occupied room. If you sold 8 rooms for a total of 96,000 rupees one night, your ADR is 12,000. ADR tells you about your pricing, but it ignores the empty rooms, so on its own it flatters a quiet hotel.
Occupancy
Occupancy = (rooms sold ÷ rooms available) × 100. If you have 20 rooms and sold 8, occupancy is 40%. This tells you about demand and fill, but ignores price, you can hit 100% occupancy by giving rooms away.
RevPAR, the number that ties it together
RevPAR = room revenue ÷ rooms available, or equivalently ADR × occupancy. With 20 rooms and 96,000 rupees of room revenue, RevPAR is 4,800. Or: 12,000 ADR × 40% occupancy = 4,800. RevPAR spreads revenue across every room whether sold or not, so it captures price and fill at once. This is the single number to grow.
Why RevPAR beats ADR alone
Imagine two nights. Night one: you hold rates high, ADR 12,000, but only 40% full, RevPAR 4,800. Night two: you drop rates, ADR 9,000, but fill to 80%, RevPAR 7,200. The "cheaper" night made more money per available room. That is the trap of chasing ADR without watching occupancy, and why RevPAR is the honest scorecard.
See your ADR, occupancy and RevPAR without a spreadsheet
Sukoon calculates all three automatically and shows the trend on your owner dashboard, the numbers a chain has, for your independent hotel.
See the owner reportsHow to lift each one
- ADR: segment your rooms, add value-based packages, and stop discounting across the board.
- Occupancy: win more direct bookings, tidy your OTA listings, and fill mid-week gaps with targeted offers.
- RevPAR: price by demand, raise rates on high-demand dates and protect occupancy on soft ones.
Track all three monthly and compare against your own past and similar local properties. For the revenue leak most small hotels miss, read how to reduce OTA commissions.
FAQs
How do you calculate ADR, occupancy and RevPAR?
ADR (Average Daily Rate) = room revenue divided by rooms sold. Occupancy = rooms sold divided by rooms available, as a percentage. RevPAR (Revenue Per Available Room) = room revenue divided by rooms available, or equivalently ADR multiplied by occupancy.
What is the difference between ADR and RevPAR?
ADR only counts rooms you actually sold, so a near-empty hotel can still show a high ADR. RevPAR spreads revenue across every available room, sold or not, so it reflects both your rate and how full you are. RevPAR is the truer measure of performance.
Is a higher ADR or higher occupancy better?
Neither alone. You can raise occupancy by dropping rates, which can lower RevPAR, or raise ADR and lose occupancy. The goal is the mix that maximises RevPAR, which is why smart pricing looks at both together.
What is a good RevPAR for a small hotel?
There is no universal number, it depends on your market, season and room type. The useful comparison is against your own past performance and against similar local properties. Track RevPAR month over month and aim to grow it.