What is RevPOR?

RevPOR, or Revenue per Available Room, is a crucial metric in the hospitality industry that calculates the total revenue generated from each available room in a hotel or property. It is essential for hoteliers as it measures the effectiveness of pricing strategies, occupancy rates, and overall revenue generation. By monitoring RevPOR, businesses can optimize pricing, occupancy, and services to maximize profitability and guest satisfaction, making it a vital performance indicator in the industry.

Key Takeaways

  • RevPOR Definition: A hotel management KPI assessing financial performance via revenue from sold rooms.
  • Distinguishing Factors: RevPOR includes additional revenue like room service, unlike ADR and RevPAR.
  • Utility and Limitation: Useful for understanding revenue per guest; however, it doesn’t consider occupancy rates.
  • Insight into Guest Spending: RevPOR provides hotel owners with insights into the average revenue generated from each guest party, offering a perspective on individual guest spending habits.
  • RevPOR Calculation: The formula for calculating RevPOR is straightforward: it’s the total revenue generated by occupied rooms divided by the number of occupied rooms.

Introduction

Revenue per occupied room, also known as RevPOR, is a KPI used within hotel management 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 make from the rooms they manage to sell.

What does RevPOR stand for?

RevPOR is concerned with the revenue generated by occupied rooms as a performance metric. It differs from the 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 occupied rooms.

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 utilized 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 that it does not concern itself with occupancy rates.

More Revenue Management KPIs

KPI stands for Key Performance Indicator. With KPI, you can measure and identify areas of success and failure and trends related to demand and customer behavior. Besides RevPOR, other important Revenue Management KPIs are Occupancy Rate, RevPAR, ADR, TRevPAR, 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.