What is TRevPar?

TRevPAR, or Total Revenue Per Available Room, is a comprehensive metric in the hospitality industry measuring total revenue (including rooms, food, and other services) earned per available room. It provides a holistic view of a hotel’s financial performance, which is crucial for strategic decision-making and optimizing revenue streams beyond just room sales.

Key Takeaways

  • Comprehensive Revenue Assessment: TRevPAR evaluates total revenue (room, food, etc.) per available room, offering a broader view of a hotel’s financial performance.
  • Formula for Calculation: TRevPAR is calculated as Total Revenue divided by the Number of Available Rooms, capturing overall revenue efficiency.
  • Differentiation from RevPAR: TRevPAR includes all revenue sources, not just room revenue, providing a more complete picture of financial health compared to RevPAR.
  • Reflects Overall Utilization: TRevPAR measures how effectively a hotel uses its space for generating revenue, beyond just room sales.
  • Informs Revenue Strategies: TRevPAR provides a comprehensive revenue picture, guiding hotels in pricing and operational adjustments.

Introduction

Total revenue per available room, or TRevPAR, is a KPI used by those within the hotel industry to assess business results. It is concerned with total revenue generated from rooms, and space available. As a result, it can play an important role in a revenue management strategy, and can provide a useful snapshot of overall performance.

What does TRevPAR stand for?

TRevPAR, or total revenue per available room, is used within the field of revenue management to assess total amount of revenue generated by a property, on a per room basis, regardless of whether rooms are sold. As a KPI, its value is in demonstrating how effectively space is being used for revenue generating purposes.

In general, hotels should aim to increase TRevPAR, because that is indicative of either an increase in average revenue, an increase in occupancy, or both. TRevPAR can be calculated with the following formula:

TRevPAR = Total Revenue / Number of Available Rooms

What is the Difference Between RevPAR and TRevPAR?

Although the metrics of RevPAR and TRevPAR seem pretty similar on the surface, there is one key difference between the two. RevPAR, as a KPI, is concerned solely with revenue generated from selling rooms, while TRevPAR factors in all revenue, including money spent on room service, in the restaurant, at the bar, etc.

Uses and Limitations

TRevPAR has a valuable role to play as a hotel industry revenue management KPI, because it provides similar information to RevPAR, but factors in all revenue generated from rooms, rather than simply the room rate. It can, therefore, provide a better view of the big picture, allowing for pricing adjustments to be made.

With that being said, there are certain limitations to TRevPAR as a performance metric. It does not take into account any costs incurred by the hotel, and it also does not factor in the actual level of occupancy.

More Revenue Management KPI’s

KPI stand for Key Performance Indicator. With KPI’s you can measure and identify areas of success and failure, as well as trends related to demand and customer behaviour. Besides TRevPAR, other important Revenue Management KPI’s are Occupancy rate, RevPARRevPOR, ADR, NRevPAR, EBITDA, ARPA and GOPPAR.

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This article is written by:

Hi, I am Martijn Barten, founder of Revfine.com. I am specialized in optimizing revenue by combining revenue management with marketing strategies. I have over 15 years of experience developing, implementing, and managing revenue management and marketing strategies and processes for individual properties and multi-properties.