ADR vs. RevPAR: what hotel owners should monitor.

Published October 20, 2026 · Zamaira Hospitality

Average daily rate (ADR) measures how much room revenue a hotel earns per room sold. Revenue per available room (RevPAR) measures how much room revenue it earns across all available room nights, including those that go unsold. Owners should review both because increasing the average selling price does not always increase the hotel's overall room revenue.

The definitions follow CoStar's STR Benchmark hotel reporting standards. Every numerical example below is hypothetical, not a documented Zamaira client result.

ADR, occupancy and RevPAR: the formulas

• Occupancy: rooms sold divided by available room nights, multiplied by 100 to express a percentage.
• ADR: total room revenue divided by rooms sold.
• RevPAR: total room revenue divided by available room nights.

RevPAR also equals ADR multiplied by occupancy expressed as a decimal. At 70% occupancy and a $120 ADR, that means $120 multiplied by 0.70, or $84 RevPAR. All figures must use the same reporting period and compatible definitions. The room-revenue numerator does not simply include every charge appearing on a guest folio.

Worked example: a 100-room hotel over two nights

Imagine a hotel with 100 available rooms. On Night A it sells 70 rooms at a $120 ADR. On Night B it sells 80 at a $110 ADR.

Night B has a lower ADR but $400 more room revenue and $4 more RevPAR. Does that mean it was better business? Not necessarily. Ten additional occupied rooms can involve incremental housekeeping, laundry, amenities, processing and booking-channel commission expenses. Revenue and profit are different questions.

When ADR and RevPAR move in different directions

ADR increases while RevPAR decreases

A hotel may raise rates and sell fewer rooms. If the improved rate does not compensate for the lost bookings, revenue per available room falls. Review booking pace, cancellation trends, local events and comparable offerings before assuming the rate change alone caused weaker demand.

RevPAR increases while ADR decreases

The hotel may have sold enough additional rooms to overcome a lower average rate, as in Night B. That can improve gross room revenue even when OTA acquisition and room-servicing expenses reduce the benefit. Segment the new bookings by channel before repeating a discounted rate strategy.

Both rise together

This can indicate strong demand and rate acceptance, but compare like-for-like weekdays, booking lead times and special-event periods. One sold-out concert weekend can distort a monthly average.

Five hotel reporting mistakes to avoid

1. Using mismatched dates: rooms sold, room revenue and available inventory must cover the same period.
2. Inflating occupancy by changing supply: use a consistent and justified available-room denominator, including applicable out-of-order reporting rules.
3. Counting free rooms as paid rooms: the STR reporting standard excludes complimentary rooms from rooms sold.
4. Averaging nightly ADR without weighting: calculate multi-day ADR from total room revenue divided by total rooms sold, not a simple mean when daily volume varies.
5. Treating RevPAR as profit: the metric does not deduct wages, utilities, card fees or OTA commissions.

A practical weekly ADR and RevPAR checklist

1. Export authorized room revenue, rooms sold and rooms available for your review dates.
2. Calculate occupancy, ADR and RevPAR using consistent definitions.
3. Separate high-demand event nights, weekends and softer weekdays.
4. Review upcoming booking pace, cancellations and remaining inventory.
5. Compare genuinely comparable room types, policies and publicly visible competitor rates.
6. Consider OTA commissions and operating expenses before recommending a promotion.
7. Document suggested rate changes, the owner's approval and a date to reassess results.

For a related decision process, read ourindependent-hotel rate management guide. It describes how to combine booking pace, demand and owner approval without assuming automated pricing is required.

What about your hotel's competitive set?

A STR Benchmark or other legitimate competitive-set report can put ADR and RevPAR in market context. The comparison works best when properties compete for similar guests and provide comparable amenities and standards. A nearby hotel's lower online rate does not automatically mean the owner should match it: consider room quality, restrictions, distribution costs and actual booking demand.

For definitions and reporting standards, see the CoStar STR Benchmark glossary, hotel performance FAQs and STR reporting guidelines. These definitions do not predict the optimal rate for an individual property.

Frequently asked questions

Is a higher RevPAR always better?

It represents higher room revenue per available room, but it does not necessarily improve operating profit. Review variable costs, commissions and net proceeds as well.

Can RevPAR improve without increasing ADR?

Yes. Selling more rooms at a similar ADR can raise RevPAR. Whether the incremental business makes financial sense depends on acquisition and servicing costs.

Does ADR include empty rooms?

No. ADR measures room revenue per room sold. RevPAR includes unsold available inventory in its denominator.

Apply the metrics to actual hotel rate decisions

Zamaira Hospitality offers outsourced hotel revenue and rate management for independent hotels, franchise owners and portfolios. A scoped engagement can connect the metrics to booking pace, pricing and documented owner-authorized decisions. Zamaira does not promise automated RMS software or a guaranteed increase in revenue.

OTA distribution managementand OTA payment reconciliation and revenue recovery address separate commercial questions. Request a confidential consultation or browse more insights.