Page 5 - Financial Fundamentals
P. 5
How Does It Impact Your Business?
• Maximizing revenue and increased profitability.
• Total Available Rooms - Important for all of the hotel's financial
calculations as it determines how many operable rooms there are
to base your revenue formulas. If you have 80 rooms but 10 are
out of service, 70 rooms will be the base to use for RevPar.
• Hotel Occupancy Percentage: The higher the occupancy, the more
room revenue. However, it is important to price your rooms at
market value so not to decrease potential profitability.
• Average Daily Rate (ADR) is useful to measure a property's
financial performance in comparison to the hotel's competitive
set.
• Revenue Per Available Room (RevPar): Represents the success
the hotel is having at selling rooms at the right price increasing
occupancy, ADR, or both.
Additional Resources
How Do I Determine my Room Rates?
Hotel Occupancy Formula Calculator
Average Daily Rate Formula
