RevPAR (Revenue Per Available Rental)
The single most comprehensive STR performance metric. Formula: ADR × Occupancy Rate. Captures both pricing power and demand simultaneously — the industry standard for comparing properties and markets.
Definition
What is RevPAR (Revenue Per Available Rental)?
RevPAR (Revenue Per Available Rental) is the single most comprehensive performance metric for short-term rentals. It is calculated by multiplying Average Daily Rate (ADR) by Occupancy Rate, or alternatively by dividing total rental revenue by the total number of nights available in the period. RevPAR simultaneously captures both pricing power and demand — you cannot achieve a high RevPAR with excellent pricing alone if guests aren't booking, and you cannot achieve it with high occupancy alone if your pricing is too low.
RevPAR is adapted from hotel revenue management and has become the standard for STR analytics. It enables true apples-to-apples comparison across markets and property types. A property with a $300 ADR and 55% occupancy ($165 RevPAR) is outperforming one with a $180 ADR and 80% occupancy ($144 RevPAR), even though the second property is booked more often. Chalet's market analytics pages display RevPAR alongside ADR and occupancy so investors can identify markets with the best combination of demand and pricing power.
For investment analysis, RevPAR feeds directly into annual revenue projections. Multiply RevPAR by 365 to estimate projected annual revenue per available night — the STR equivalent of a hotel's RevPAR-based income model. Tracking RevPAR over time reveals whether a property is growing its revenue engine or experiencing demand erosion relative to the market.
Formula
RevPAR = ADR × Occupancy Rate
Real-world example
Scenario
A 2-bedroom condo in Scottsdale, AZ with a $225 ADR and 71% occupancy.
Calculation
RevPAR = $225 × 0.71 = $159.75. Annual revenue estimate = $159.75 × 365 = $58,309.
Result
The market average RevPAR is $145. This property outperforms by 10%, likely due to premium finishes and a desirable neighborhood. Even a competing listing at $260 ADR but 55% occupancy only produces $143 RevPAR — lower despite the higher nightly rate.
Why it matters for STR investors
RevPAR tells you whether a property's revenue engine is actually performing. You can have a high ADR and still dramatically underperform if bookings are weak. RevPAR catches both failure modes in a single number. When comparing markets before a purchase, look for high RevPAR — it means guests are both showing up and paying good rates.
Key points
- RevPAR = ADR × Occupancy Rate (or Total Revenue ÷ Available Nights)
- Captures pricing power and demand simultaneously — one number, complete picture
- Industry standard for comparing STR market and property performance
- Multiply RevPAR × 365 for a quick annual revenue estimate
- Seasonal RevPAR variance can be 3–4x between peak and shoulder seasons
- Higher RevPAR does not guarantee strong cash flow — expenses still matter
Chalet tools
