Which equation combines both price and utilization into a single metric?

RevPAR, or Revenue per Available Room, effectively combines both price and utilization into a single metric for measuring performance in the hospitality industry, particularly in hotels. This metric is calculated by taking the total room revenue and dividing it by the number of available rooms over a specific period.

The significance of RevPAR lies in its dual focus: the revenue generated (price) and occupancy rates (utilization). By incorporating both elements, RevPAR offers a comprehensive view of how well a hotel is capitalizing on its room inventory. A high RevPAR indicates effective pricing strategy and/or high occupancy, reflecting positively on a hotel's operational efficiency and profitability.

In contrast, other options do not encapsulate both price and utilization as effectively. For example, Average Intention Rate focuses primarily on interest levels rather than financial performance metrics. Average Revenue typically considers revenue but does not factor in occupancy rates, making it less indicative of performance relative to available resources. Return on Investment quantifies financial returns relative to investments but does not inherently involve pricing or utilization metrics, which are critical in the context of revenue per room. Thus, RevPAR stands out as the most suitable metric combining these critical aspects of hotel performance.