Revenue per occupied room, also known as RevPOR, is a KPI used within the hotel industry to assess financial performance. As a result, it can play a role in a revenue management strategy. Its main value to hotel owners is in giving them an idea of exactly how much revenue they are making from the rooms that they manage to sell.
What does RevPOR stand for?
As a performance metric, RevPOR is concerned with all of the revenue generated by occupied rooms. It differs from average daily rate (ADR) by including revenue stemming from things like room service, and it differs from revenue per available room (RevPAR) because it only factors in rooms that are occupied.
For revenue management purposes, it can give owners an understanding of how much revenue they are generating, on average, from each party that stays at the hotel, providing some indication of individual spending habits.
How Do You Calculate RevPOR?
The simple formula for calculating the KPI revenue per occupied room (RevPOR) is as follows:
RevPOR = Total Revenue Generated By Occupied Rooms / Number of Occupied Rooms
Uses and Limitations
Although RevPOR tends to be utilised slightly less than ADR and RevPAR, it is useful for revenue management purposes, because it gives hotels an idea of how much revenue they bring in per guest party and, unlike the aforementioned metrics, it includes revenue generated through things like room service. With that being said, one limitation of RevPOR as a KPI is the fact that it does not concern itself with occupancy rates.
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 RevPOR, other important Revenue Management KPI’s are Occupancy rate, RevPAR, ADR, TRevPAR, NRevPAR, EBITDA, ARPA and GOPPAR.