Talk:RevPAR

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Two components[edit]

I redid the calculation. Not sure why "RevPAR = ADR/Rooms Available" as was stated before. RevPAR calculation has two components: rooms revenue and rooms available. ADR is already a calculated value (ADR = Roms Revenue / Rooms Sold). Would love to hear your thoughts.--Hotelfreitja (talk) 16:49, 3 August 2008 (UTC)[reply]

I think the link to the revpar calulator should be removed. It reads like a promotional "for profit" item. More importantly, it calculates RevPAR based on Occupancy and ADR, which is really just an estimate. The real way to calculate, as described above, is to devide total rooms revenue by number of rooms available. Hotelfreitja (talk) 15:02, 28 June 2009 (UTC)[reply]

But that (a) is not cited anywhere (and conflicts with the only citation, which says that is the calculation for RevPAR) and (b) appears to be the same, mathematically. Occupancy = rooms sold / rooms available, ADR = rooms revenue / rooms sold, so revPar = occupancy * ADR = rooms revenue / rooms available. Otherwise it would be saying the volume of a cylinder is not equal to the length * area of the cross section, it's equal to the length * pi * radius (squared); the two are equivalent (notwithstanding arguments about what count as rooms available, pace what's written below). Unsubstantiated111 (talk) 07:42, 27 January 2011 (UTC)[reply]

Calculating RevPAR[edit]

I noticed a presentation of Bali Hospitably Professional Service that did something strange with the Rooms Available part of the RevPar calculation--it subtracted out of order rooms. While on the surface this makes sense (if a room is out of order it is not available) doesn't this cause other problems and does the industry do it this way? There is an article Slattery, Paul (2002) "Reported RevPAR: unreliable measures, flawed interpretations and the remedy" International Journal of Hospitality Management Volume 21, Issue 2, June 2002, Pages 135-149 that looks promising.--BruceGrubb (talk) 22:05, 14 January 2010 (UTC)[reply]

In general, it is easiest to keep OOO rooms in the number available to make future comparisons easier. Smith Travel Research ( www.str.com) guidelines suggest that OOO rooms are only taken out of inventory when they are closed for 6 or more months. Since the real power of the RevPAR number is to compare it over time it makes sense to keep the number of rooms available as steady as possible. Hotelfreitja (talk) 15:15, 7 November 2010 (UTC)[reply]

I don't really think this objection makes sense, as the tag is PAR: if the room is unavalable, it should be part of the equation. RevPAR may be used to decide on things like closure of certain rooms, in theory, even of all floors, which is why a good notion of revenue per room is important. But if you add rooms that are unavailable, you'll be degrading the quality of this index. —Preceding unsigned comment added by 89.109.81.18 (talk) 16:58, 15 December 2010 (UTC)[reply]

I know it's been a while, but I'd still like to answer this. The reason that ooo rooms aren't generally counted is that rooms can be ooo for reasons that don't really equal being unavailable. For example, some places put rooms out of order if housekeeping decided not to clean them that day (say due to call offs) This can be useful; nonetheless, the room is not really "unavailable", just not cleaned [if you object, consider that you could conceivably clean only the rooms needed, then you would have a higher revpar than you should] Other reasons exist, but the point is that ooo doesn't mean not available, but, instead, means the hotel is deciding not to use the room that day (and, yes, some hotels have an off market category for this, but that isn't always the best choice as some third party sites still consider this as an open room, etc.) It just so happens that sometimes the hotel decides not to use the room because it is actually unavailable. [Related: hotels have a lot of control over putting rooms ooo for the short term in ways that won't impact their revenue intake, so another reason could be to keep the statistic honest since counting ooo blindly would allow easy manipulation.] [Final parenthetical: there are other places where hotel occupancy is important, some that directly affect the franchise fees for major chains, that have the same view of ooo rooms, so it is not nonstandard to look at things this way.] Phoenixia1177 (talk) 08:32, 20 May 2012 (UTC)[reply]