Hotel KPIs Every Hotelier Must Track: RevPAR, ADR, Occupancy and More
A hotel can sell nearly every room and still earn less revenue than it would with fewer bookings at higher rates. And even when room revenue increases, that doesn't necessarily mean the hotel is making more profit.
Hotel KPIs help you understand these differences. By tracking occupancy, average room rates, revenue, and operating profit, you can assess your hotel's performance and identify areas that need attention.
What are hotel KPIs?
Hotel key performance indicators (KPIs) are metrics used to measure a property's financial and operational performance. Some show how effectively a hotel sells its rooms, while others measure revenue, operating costs, guest booking patterns, or performance compared with the market.
Each metric measures a different aspect of hotel performance, so the results are most useful when considered together.
Key Hotel KPIs: Occupancy, ADR, and RevPAR
Occupancy, ADR, and RevPAR are the main indicators of room sales performance. Together, they show how many rooms a hotel sells, the average rate it achieves, and how much room revenue it generates from its available inventory.
Consider a 100-room hotel that sells 80 rooms in one night and generates €12,000 in room revenue. We can use these figures to calculate all three metrics.
For longer periods, use total room nights sold and available room nights rather than the number of physical rooms.
Occupancy rate
The hotel occupancy rate shows the percentage of available rooms sold during a given period.
Occupancy rate = Rooms sold ÷ Rooms available × 100
For the 100-room hotel:
80 ÷ 100 × 100 = 80%
Occupancy helps you identify busy and quiet periods, understand how much inventory remains available, and plan hotel operations. However, it doesn't show what guests paid for those rooms.
Average daily rate (ADR)
ADR (Average Daily Rate) measures the average room revenue earned per room sold.
ADR = Room revenue ÷ Rooms sold
Using the same figures:
€12,000 ÷ 80 = €150
The hotel's ADR is €150. This metric helps you assess room pricing performance across different dates, seasons, and guest segments.
ADR is based on room revenue, excluding taxes and revenue from additional services such as breakfast or parking.
Because ADR only considers rooms sold, it doesn't show how many rooms remained empty. A higher ADR isn't necessarily a better result if the hotel sells significantly fewer rooms.
Revenue per available room (RevPAR)
RevPAR (Revenue per Available Room) measures room revenue against all available rooms, including those that weren't sold.
RevPAR = Room revenue ÷ Rooms available
You can also calculate it using occupancy and ADR:
RevPAR = ADR × Occupancy rate
For the same hotel:
€12,000 ÷ 100 = €120
Or:
€150 × 0.80 = €120
When using the second formula, occupancy must be expressed as a decimal.
RevPAR combines occupancy and ADR, making it useful for evaluating how effectively a hotel generates revenue from its room inventory.
Consider two possible results for a 100-room hotel:
| Metric | Scenario A | Scenario B |
|---|---|---|
| Rooms sold | 90 | 80 |
| Occupancy | 90% | 80% |
| ADR | €120 | €150 |
| Room revenue | €10,800 | €12,000 |
| RevPAR | €108 | €120 |
Scenario B sells ten fewer rooms but generates €1,200 more room revenue and achieves higher RevPAR.
This is the main difference between ADR and RevPAR: ADR shows the average rate earned on sold rooms, while RevPAR accounts for both room rates and occupancy.
Neither metric measures profit. A hotel can achieve high RevPAR while also having substantial operating or distribution costs.
KPIs that measure revenue and profitability
Occupancy, ADR, and RevPAR focus on room sales. To get a fuller picture of your hotel's financial performance, you also need to consider revenue from other services, distribution costs, and operating expenses.
Total revenue per available room (TRevPAR)
TRevPAR (Total Revenue per Available Room) measures total hotel revenue per available room. Unlike RevPAR, it includes income from restaurants, spa services, parking, and other hotel operations.
TRevPAR = Total hotel revenue ÷ Available rooms
Suppose our 100-room hotel generates €12,000 in room revenue and another €3,000 from additional services during the same night.
€15,000 ÷ 100 = €150
The hotel's TRevPAR is €150, compared with RevPAR of €120.
TRevPAR is especially useful for hotels with significant revenue from restaurants, spas, events, or other services. However, it doesn't account for operating costs, so it measures revenue rather than profit.
Net revenue per available room (NRevPAR)
NRevPAR (Net Revenue per Available Room) measures room revenue after deducting distribution and booking acquisition costs.
NRevPAR = (Room revenue − Distribution and acquisition costs) ÷ Available rooms
These costs may include OTA commissions, transaction fees, and other expenses associated with acquiring bookings, depending on how the hotel calculates the metric.
Suppose the hotel earns €12,000 in room revenue and spends €1,200 on distribution and booking acquisition.
(€12,000 − €1,200) ÷ 100 = €108
The hotel's NRevPAR is €108, compared with RevPAR of €120.
NRevPAR helps you understand how distribution costs affect the revenue you retain. Two channels may generate bookings at the same room rate but leave the hotel with different amounts after commissions and other acquisition costs.
For meaningful comparisons, use the same cost definitions across reporting periods.
NRevPAR is especially useful when a hotel wants to understand which channels actually bring stronger net revenue. As part of Exely’s outsourced Revenue Management Support, specialists compare channel performance after commissions and other acquisition costs, then use this data to review rate structure and channel mix.
Gross operating profit per available room (GOPPAR)
GOPPAR (Gross Operating Profit per Available Room) measures gross operating profit per available room.
GOPPAR = Gross operating profit ÷ Available rooms
Gross operating profit is calculated by deducting the relevant operating expenses from operating revenue, using a consistent accounting method.
Suppose the hotel generates €15,000 in operating revenue and incurs €10,000 in operating expenses, leaving €5,000 in gross operating profit.
€5,000 ÷ 100 = €50
The hotel's GOPPAR is €50.
GOPPAR helps you assess whether higher revenue is translating into higher operating profit. For example, a hotel may increase room sales or revenue from additional services while also facing higher staffing, housekeeping, or service costs.
How these KPIs differ
| KPI | What it measures |
|---|---|
| RevPAR | Room revenue per available room |
| TRevPAR | Total hotel revenue per available room |
| NRevPAR | Room revenue after defined distribution and acquisition costs, per available room |
| GOPPAR | Gross operating profit per available room |
TRevPAR and GOPPAR generally require financial information beyond the room revenue reports available in a PMS. Consistent accounting and cost allocation are important when comparing results.
Other useful hotel performance metrics
Alongside revenue and profitability, it's useful to track how guests book and stay at your hotel. These patterns can help explain changes in occupancy and operating costs.
| Metric | What it shows | Why it matters |
|---|---|---|
| Average length of stay (ALOS) | Average number of nights per stay | Helps assess stay patterns and room turnover |
| Booking pace | How quickly reservations build for future dates | Helps identify changes in expected demand |
| Cancellation rate | Share of reservations canceled during a defined period | Helps assess cancellation patterns and expected occupancy |
Average length of stay (ALOS) is calculated by dividing the total room nights of completed stays by the number of those stays. For example, 240 room nights across 80 stays gives an ALOS of three nights.
A longer average stay may mean fewer room turnovers, although the financial impact also depends on room rates, guest spending, and operating costs.
Booking pace and cancellation rates are particularly useful when forecasting future occupancy. For a detailed explanation of these indicators and how to use them, see our guide to Hotel Demand Forecasting: How to Predict Occupancy and Plan Ahead.
How to benchmark your hotel KPIs
To understand how your hotel is performing, compare its KPIs with previous results and with similar properties in the market.
Start with your own historical data. Compare similar weekdays, seasons, and demand periods. For example, a Saturday in peak season may not be a useful comparison for a quiet weekday in January. You can also compare your results with a comp set — hotels that compete for similar guests.
Hotel benchmarking commonly uses three indexes to compare occupancy, ADR, and RevPAR with the comp set:
| Index | Formula | What it compares |
|---|---|---|
| MPI (Market Penetration Index) | Your occupancy ÷ Comp set occupancy × 100 | Occupancy performance |
| ARI (Average Rate Index) | Your ADR ÷ Comp set ADR × 100 | Average room rate |
| RGI (Revenue Generation Index) | Your RevPAR ÷ Comp set RevPAR × 100 | Room revenue performance |
An index of 100 means your hotel matches the comp set benchmark. Above 100 means your hotel performs above the benchmark for that metric, while below 100 means it performs below it.
For example, if your hotel's RevPAR is €120 and the comp set RevPAR is €100:
RGI = €120 ÷ €100 × 100 = 120
Your hotel's RevPAR is 20% higher than the comp set benchmark. However, a high RGI doesn't necessarily mean your hotel is more profitable.
Benchmarking reports from providers such as STR can help you track these indexes over time. Make sure your comp set is relevant and that you're comparing the same reporting periods and metric definitions.
How to use hotel KPIs to make better decisions
Changes in hotel KPIs can help you identify pricing, distribution, or operational issues that need attention. The important thing is to understand what is driving those changes before deciding how to respond.
Here are some common situations and what to investigate:
| What you see | What to investigate |
|---|---|
| High occupancy but low ADR | Whether room rates are too low for the demand |
| ADR rises while occupancy falls | Whether RevPAR and total room revenue are improving |
| RevPAR increases but GOPPAR falls | Whether operating costs are increasing faster than revenue |
| Strong occupancy but low NRevPAR | Distribution costs and the mix of booking channels |
| ALOS decreases | Changes in guest mix, booking patterns, and room turnover costs |
| RGI is below 100 | Whether your hotel's RevPAR is below the comp set benchmark and what explains the difference |
These patterns don't always indicate a problem. For example, lower occupancy may be acceptable if higher room rates generate more revenue or profit. A temporary increase in operating costs may also explain a decline in GOPPAR.
Review the figures alongside booking patterns, market conditions, and your hotel's commercial goals before making changes to pricing or operations.
FAQ about hotel KPIs
Which KPIs should a small hotel track first?
Occupancy, ADR, and RevPAR are a good starting point. They help you track room sales and revenue without requiring complex financial reporting. As your reporting develops, you can add metrics such as NRevPAR and GOPPAR.What is a good RevPAR for a hotel?
There is no universal benchmark. A good RevPAR depends on your location, hotel category, season, and market conditions. Compare your results with similar properties and your own performance over time.Can hotels of different sizes compare their KPIs?
Yes. Metrics such as RevPAR and GOPPAR account for available room inventory, making comparisons between hotels of different sizes possible. However, comparisons are more meaningful when the properties have similar positioning, guest segments, and operating models.Why do hotel KPI figures sometimes differ between reports?
Reports may use different reporting periods, revenue definitions, room availability figures, or accounting methods. Check how each metric is calculated before comparing results from different systems.