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For hotels: RevPar and ARR explanations

How many hosts understand and use RevPar and ARR? What do they mean and how can they benefit a hotel to grow its future revenue and make profitability decisions?

ARR = Average room rate

RevPar = Revenue per available room

Let’s take a look at the example of how he has sold 20 rooms in 100 rooms of 100 rooms and has not sold 20 rooms.

The ARR is divided by 100 x 30 = 3000 30 = 100 per room

RevPar is 100 x 30 = 3000 divided by 50 = 60 per room

Two completely different figures. ARR sells rooms on average. RevPar averages rooms that are sold and unsold.

When looking for a hotel that can reliably measure how rates and revenue work, ARR creates an impression on real figures, while RevPar gives a true picture of the revenue earned on the hotel. general power.

So how do hotels use that to their advantage? There are several ways to look at revenue generation.

(1) lower the rate and sell 80 rooms 80 = 4000 with 80 RevPar

(2) Sell 30 rooms to 100 rooms, then lower the sale rate by increasing overall turnover and RevPar

The hosts' decision is how to use demand in their area, tilt rates, match demand and rates to optimize employment and income and look for the best RevPar that they can.