Occupancy, ADR, and RevPAR, Explained

Occupancy

Occupancy is the percentage of available rooms that were sold in a given period.

Occupancy = Rooms Sold ÷ Rooms Available

An 80-room hotel that sells 60 rooms on a given night has 75% occupancy. On its own, occupancy tells you how full the hotel is — it says nothing about what those rooms sold for.

ADR (Average Daily Rate)

ADR measures the average price paid per room sold.

ADR = Room Revenue ÷ Rooms Sold

If that same 80-room hotel sold 60 rooms for a combined £12,000 in room revenue, ADR works out to £200. ADR tells you about pricing — but on its own, it says nothing about how many rooms actually sold.

RevPAR (Revenue Per Available Room)

RevPAR combines the two, and is usually the number that matters most to ownership.

RevPAR = Room Revenue ÷ Rooms Available, which is mathematically the same as Occupancy × ADR.

In the example above: 75% occupancy × £200 ADR = £150 RevPAR. RevPAR is useful precisely because it can’t be improved by moving one number at the expense of the other — a hotel that discounts heavily to fill rooms and a hotel that holds rate but sits half-empty can land on a very similar RevPAR.

Where each number can mislead you alone

• High occupancy with low ADR can mean the hotel is underpricing relative to demand.
• High ADR with low occupancy can mean the hotel is overpricing and leaving rooms empty.
• RevPAR can look healthy while occupancy is quietly falling and ADR is rising to compensate — worth catching before it becomes a trend.

None of these patterns are visible from any one metric in isolation. That’s why they’re almost always reviewed together, and almost always tracked against budget and the same period last year, not just as a standalone snapshot.

Why this belongs on one dashboard, not three reports

Occupancy usually lives in the PMS, ADR gets calculated from room revenue, and RevPAR is a derived figure — which means whoever is pulling these together by hand is doing the same calculation, on the same data, in a slightly different way, every single week. Putting all three on one dashboard, tracked against budget and prior year automatically, removes that repeated manual step.