RevPAR Performance Analysis

RevPAR performance analysis is the practice of measuring, decomposing, and benchmarking hotel performance using revenue per available room and its companion metrics. RevPAR distills a hotel's success into a single figure, rooms revenue divided by rooms available, that equals average daily rate multiplied by occupancy and so captures both the price a hotel commands and how full it is. The metric anchors revenue management, whose objective Kimes framed as maximizing yield from fixed capacity, and it is the standard yardstick for comparing hotels. Enz, Canina, and Walsh, however, showed that relying on single industry averages is misleading because hotel performance is dispersed and skewed, which is why rigorous RevPAR analysis decomposes the metric into its drivers and benchmarks it against a competitive set with indices rather than crude averages.