Total Revenue per Available Room (TRevPAR)

What is Total Revenue per Available Room (TRevPAR)?

Move over RevPAR, there’s a new KPI in town. Recently, TRevPAR, which is short for Total Revenue per Available Room, has been gaining recognition as an important measure of success for lodging businesses in the hospitality industry. Why? Because unlike other key performance indicators (KPIs) like RevPAR (revenue per available room), average daily rate (ADR), and occupancy rate, TRevPAR measures total revenue performance for the entire property, not just rooms.

TRevPAR definition

TRevPAR is a measure of the total income generated by a lodging property divided by the number of rooms available for sale within a given time period. Depending on a property’s revenue streams, this may include income from room sales, the restaurant and bar, function space, room service, spa, parking, Wi-Fi, in-room entertainment, activities, and miscellaneous income such as cancellation fees.

What is the difference between TRevPAR & RevPAR?

The key difference between hotel KPIs TRevPAR and RevPAR is TRevPAR measures total hotel revenue, whereas RevPAR measures only room revenue. While RevPAR is still an important metric, TRevPAR provides lodging operators with a more complete snapshot of financial performance.

For most accommodation businesses, room revenue represents the highest proportion of overall revenue, but that isn’t always the case. For some properties, non-room revenue can represent a substantial portion of total revenue. For example, a large resort with multiple restaurants, bars, and conference rooms that caters to locals and travelers staying at other properties and its in-house guests may earn more income from F&B than from rooms. On the other hand, smaller properties and limited-service hotels may have little or no additional revenue aside from room revenue.

Note that RevPAR and TRevPAR break down revenue by available rooms, which differs from occupied or sold rooms. Available rooms refers to the total number of rooms available for sale on the property, including sold, unsold, occupied, and unoccupied rooms.

Have you checked out Cloudbeds’ free online tools for calculating your property's RevPAR, occupancy, and average daily rate (ADR)?

How is TRevPAR calculated?

TRevPAR is calculated by dividing the total net revenue of a property by the total available room nights during a given period. You can pull revenue information from your property’s P&L statement or balance sheet.

TRevPAR formula

TRevPAR = Total Revenue / Total Available Room Nights

Note that total available room nights are calculated by multiplying the number of available rooms on property by the number of nights in the measured period, such as a month or year.

TRevPAR example

For example, if a 32-room hotel generates $27,250 in room revenue in January, plus $2,820 in breakfast revenue and $760 in equipment rentals, its total revenue for that month is $30,830. To calculate total available room nights, multiply 32 rooms by 31 days in January, which equals 992. So the hotel’s Total Revenue per Available Room (TRevPAR) for January would be $30,830 / 992 = $31.08.

Compare that to the property’s RevPAR, which would be calculated by dividing $27,250 by 992, equal to $28.47. RevPAR shows how well the hotel generates average rates and occupancy, but it doesn’t show how successful it is at enticing guests to spend money on onsite services.

Why lodging operators should measure TRevPAR

If hotels wish to grow revenue, in addition to increasing occupancy, they will need to look at other revenue sources outside the guestroom. TRevPAR provides a key metric for tracking all sources of revenue and taking a more big-picture, less room-centric approach to growing your business.

However, it’s important to note that TRevPAR has limitations of its own. First, it doesn’t take into account hotel operation costs or profitability. That’s why many hoteliers also use GOPPAR (gross operating profit per available room) as a key performance metric. GOPPAR factors in total revenue and operating costs to measure a property’s operating profit by room.

And second, while it’s relatively easy to compare rates and availability with competitors using revenue management software, data on total spend on property isn’t as readily available. However, companies like STR and HotStats now make this data available to subscribers, allowing them to benchmark RevPAR, TRevPAR, GOPPAR, and other metrics against their competitive set.

What affects your TRevPAR?

Many factors can influence TRevPAR. Here are a few examples.

• The number of rooms available for sale on property
• The number of rooms sold each night (occupancy)
• The availability of products and services for sale on property
• Pricing for rooms, food & beverage, and ancillary services like parking, retail outlets, and spa
• How much money guests spend on onsite services
• Discounts, promotions, and packages that bundle rooms with other services
• The property’s business or segment mix (leisure, business, group, etc.)
• The property’s channel mix (OTA, direct, wholesale, GDS, etc.)
• External factors such as market demand, economic conditions, weather, and travel disruptions

8 ways hotels can increase TRevPAR

Now that you understand what TRevPAR is, it’s time to find ways to increase it for your independent lodging business, whether you operate a hotel, inn, hostel, vacation rental, or other type of accommodation.

Here are just a few ideas to help get those creative juices flowing.

1. Set TRevPAR objectives. Calculate your TRevPAR for last year and each month of the year. Then set objectives for the coming months and year based on what you feel is reasonable and achievable. Include these objectives in your property’s annual budget and operating plan.
2. Share objectives with your team. Employees in guest-facing positions such as front desk, F&B, and retail outlets are often in the position to help your property generate incremental revenue. Consider providing incentives or bonuses for promoting onsite services and reaching revenue targets as part of your revenue management strategy.
3. Expand ancillary services. To improve hotel performance, you may need to offer additional products or services for sale. Be creative about ways to generate more guest spend on property, whether it’s offering branded merchandise for sale, repurposing underutilized restaurant or function space as a coworking space during the day, or purchasing recreational equipment to rent out to guests.
4. Offer activities and experiences. According to Cloudbeds’ 2024 outlook, more travelers will be seeking unique experiences… Work with local activity operators to bundle stays with local experiences and onsite services.
5. Offer an upsell program. Provide guests opportunities to upgrade rooms or add amenities pre-stay or on arrival; guest communication software and upsell tools can help automate this.
6. Increase your pricing. Review pricing not just for rooms but for all other revenue-contributing products and services (menus, meeting space, parking). Perform a competitive survey to ensure positioning is appropriate.
7. Review your business mix. Calculate TRevPAR by segment (leisure, business, group, repeat/loyalty). Segments with higher TRevPAR should get prioritization—even if their ADR is lower—once costs are considered.
8. Review your channel mix. Do the same across OTAs, direct, GDS, wholesale, etc. Focus on channels driving higher TRevPAR, but weigh in guest acquisition costs to understand profitability.