Revenue per available room, or RevPAR, and revenue per occupied room, or RevPOR, are two KPIs used within the hotel industry, especially for revenue management purposes. Although the two metrics have similar names, what they measure is actually quite different, meaning neither KPI is necessarily more useful than the other.
How Do You Calculate RevPAR and RevPOR?
The formulas for working out the revenue management metrics RevPAR and RevPOR are as follows:
RevPAR vs RevPOR
As a KPI, RevPAR is concerned with the amount of revenue generated by the hotel in relation to the number of rooms that are available. Therefore, it is useful to those operating in hotel management, because it indicates how well their business is making use of the rooms at their disposal. With that being said, a limitation is that it is only concerned with revenue from room rates, which is not indicative of overall business performance.
By contrast, RevPOR is concerned with the total amount of revenue generated by rooms that are occupied. Unlike RevPAR, it factors in additional revenue earned through other services, such as food and laundry. It is useful as a KPI, because it reveals how much revenue, on average, the hotel is taking from each room they sell. However, a limitation is that it does not factor in the percentage of rooms that are actually sold.
Therefore, the question of RevPAR vs RevPOR is less about which is better for revenue management, and more about how to use both to indicate different things.