Total Revenue Per Available Room (TRevPAR) is a hotel KPI that gives a more holistic view of the total revenue generated from all departments. It differs from RevPAR by accounting for more than the revenue generated by only rooms sold.
What is Total Revenue Per Available Room (TRevPAR) For?
TRevPAR is often used as a benchmarking tool for all-inclusive hotels and resorts. It is a more inclusive metric for displaying how effectively a hotel is using its space to generate revenue. It allows managers to see how a hotel is generating revenue regardless of whether or not rooms are sold.
Benefits of Total Revenue Per Available Room (TRevPAR)
TRevPAR can be a preferable metric for board members and accountants because it provides a broader and more generic evaluation of a hotel’s performance. It provides a more comprehensive view of how well a hotel is generating revenue because it includes revenue generated from amenities from room service sales, restaurant sales, bar sales, and more. This bigger picture view allows for more effective pricing adjustments to be made.
Limitations of Total Revenue Per Available Room (TRevPAR)
A hotel’s management board and accountants should be careful making decisions solely based on TRevPAR calculations. The main limitations of TRevPAR stem from how it does not account for costs incurred by the hotel (as GOPPAR does), and it does not factor in Occupancy Rate.
How is Total Revenue Per Available Room (TRevPAR) Calculated
TRevPAR is calculated by dividing a hotel’s total revenue by the total number of available rooms. Total Revenue should include revenue from accommodations, breakfasts, bar sales, mini bar sales, spa sales, and any ancillary sales.
Example of Total Revenue Per Available Room (TRevPAR) Calculation
TRevPAR = Total Revenue / Total Available Rooms
We’re calculating TRevPAR annually in the following section
Total Revenue = $3,080,000
Total Available Rooms = 15,680
TRevPAR = $3,080,000 (Total Revenue) / 15,680 (Total Available Rooms) = $196.43