How is the RevPAR calculated using Method 1?

RevPAR, or Revenue Per Available Room, is a key performance indicator in the hotel industry that measures a property's ability to fill its available rooms at an average rate. When calculating RevPAR using Method 1, the formula used is Total Room Revenue divided by Rooms Available.

This method provides a straightforward way to gauge how much revenue is generated per available room, regardless of whether the rooms were actually sold or not. By focusing on total room revenue in relation to the total number of rooms that could be sold (whether occupied or not), this calculation helps hotel operators understand their overall revenue performance and occupancy efficiency.

Using this method is particularly useful for assessing the effectiveness of revenue management strategies, as it includes all rooms in the inventory, thereby giving a full picture of potential revenue opportunity. In contrast, other methods that focus only on sold rooms or occupancy risk overlooking the total revenue potential represented by the entire capacity of the property.