TRevPAR

Quick definition and formula

What TRevPAR stands for (concise definition)

TRevPAR (Total Revenue per Available Room) is a hotel and real‑estate KPI that measures total property revenue—rooms plus all ancillary income—divided by the number of rooms available over a period. It gives a fuller picture than room‑only metrics of how much revenue each room generates for owners and investors.

Mathematical formula and units (daily, monthly, annual examples)

Formula: TRevPAR = Total Revenue (all operating revenue) ÷ Rooms Available for the period.

Units/examples:

• Daily: TRevPAR(day) = Total revenue for the day ÷ Total rooms available that day.
• Monthly: TRevPAR(month) = Total month revenue ÷ Number of rooms × days in month (or better: total room‑days available in month).
• Annual: TRevPAR(year) = Total year revenue ÷ (Rooms × 365 or total room‑days available).

Simple numeric example (one-line calculation)

Example (monthly): Total revenue $128,000 ÷ 100 rooms = TRevPAR $1,280 for the month.

What “Total Revenue” includes (and excludes)

Typical revenue streams to include (rooms, F&B, banquets, spa, parking, other outlets)

Total revenue should include all operating revenue earned by the hotel during the period, commonly:

• Room revenue (transient & group)
• Food & Beverage (restaurants, bars, room service)
• Banquets & meeting/event revenue
• Spa, wellness, and recreational income
• Parking, transportation, and ancillary guest services
• Retail, tours, and other outlet sales

Common exclusions and why (non‑operating income, capital reimbursements)

Exclude non‑operating and non‑recurring items that distort operational performance, such as:

• Capital reimbursements, insurance proceeds, and asset sales
• Owner‑level management/franchise reimbursements that aren’t operating revenue
• One‑off development or relocation credits

Keeping TRevPAR to operating revenue ensures comparability across assets.

Special cases: managed vs leased properties, third‑party outlets, franchise/management fees, taxes

Definitions can shift by contract:

• Managed hotels often report total revenue on a consolidated P&L; include third‑party outlet revenue only if it flows through the hotel’s operating revenue (not when retained by third parties).
• Leased hotels recognize rent as an expense—use the owner’s operating revenue approach.
• Franchise/management fees: include them only if they are recorded as hotel revenue on the P&L; otherwise treat as an owner expense or deduction.
• Taxes collected (e.g., VAT) should be treated consistently—preferably exclude non‑operating tax passthroughs and include net revenue retained by property.

How to calculate TRevPAR from financial systems

Step‑by‑step: from P&L to per‑available‑room metric

1. Identify the period (day/month/year) and compute total room‑days available: Rooms × days (less permanent closures).
2. Pull total operating revenue from the P&L—sum all revenue lines you’ve agreed to include.
3. Divide total operating revenue by room‑days available to get TRevPAR for the period.
4. Document any adjustments (non‑recurring items removed, outlet exclusions) in an audit note.

Mapping PMS / POS / ERP exports to “total revenue”

Map charge codes from PMS/POS/ERP to standard revenue buckets (Rooms, F&B, Banquets, Spa, Parking, Other). Reconcile gross outlet sales to the P&L after discounts, comps and internal transfers. Maintain a mapping table: channel code → revenue bucket → P&L line.

Handling partial months, openings, and seasonality (annualizing & normalization)

For partial periods or new openings:

• Use actual room‑days available (not pro‑rating rooms) to avoid denominator errors.
• Annualize with caution — only after normalizing for ramp‑up, major events, or known one‑offs.
• Normalize multi‑year seasonality by using rolling 12‑month TRevPAR or comparing same‑month prior year.

Example spreadsheet formulas and audit trail tips

Example Excel cells (compressed):

B2=Total operating revenue (sum of revenue lines)
B3=Rooms available × days (room‑days)
B4= =B2/B3  (TRevPAR)

Audit tips: keep a revenue mapping worksheet, reconcile PMS daily revenue to P&L monthly totals, and retain comments for any adjustments.

TRevPAR vs related metrics — when to use each

RevPAR vs TRevPAR: what each tells you

RevPAR (RevPAR) = Room Revenue ÷ Rooms Available. Use RevPAR to evaluate pure room yield and pricing effectiveness. TRevPAR adds ancillary revenue and shows the total monetization per room — important for full‑service properties where F&B, events and spa drive value.

GOPPAR, ADR, and NOI: complementary uses and limitations

Complementary KPIs:

• GOPPAR (GOPPAR) focuses on gross operating profit per available room — adds cost visibility and is useful for operational efficiency.
• ADR (ADR) isolates average room rate and pricing strategy, independent of occupancy.
• NOI (NOI) is owner‑level profitability after operating expenses and is essential for valuation.

Use TRevPAR for top‑line revenue productivity, GOPPAR for margin performance, and NOI for investment value.

How to read the set of metrics together for operational vs investment decisions

Operators watch ADR, occupancy and GOPPAR to refine pricing and cost control. Investors layer TRevPAR and NOI to value assets and identify upside (e.g., ancillary revenue growth). Compare RevPAR vs TRevPAR to see if non‑room revenue is a strategic advantage or a risk.

Benchmarking and market context

Typical TRevPAR ranges by hotel type (limited‑service, full‑service, resort, boutique)

Benchmarks vary widely by market and segment; illustrative ranges (USD TRevPAR/month) for context only:

• Limited‑service: $200–$800
• Full‑service city hotel: $800–$3,000
• Resort/luxury: $2,000–$8,000+
• Boutique/urban lifestyle: $1,000–$4,000

Always use local comp sets and adjust for ADR/occupancy differences.

Market factors that move TRevPAR (location, demand mix, group vs transient, seasonality)

Key drivers: location/market demand, % group vs transient business, event calendars, on‑site F&B and meeting capacity, competition and pricing strategy, and seasonality or destination demand.

Sources for comparable data (STR, CBRE, PKF, STR reports, local comps)

Data sources: STR market reports, CBRE & PKF research, local STR comps, industry benchmarking subscriptions, and proprietary PMS/POS datasets. Use multiple sources to validate benchmarks.

Using TRevPAR in underwriting, valuation and forecasting

Role in pro formas and sensitivity analysis

TRevPAR is a top‑line driver in pro formas. Model sensitivities to occupancy, ADR and ancillary spend per occupied room to see impact on revenue, GOP and NOI. Use scenario analysis (base / upside / downside) to capture mix shifts.

Forecast drivers: occupancy, ADR, ancillary spend per occupied room, event & banquet revenue

Key forecast levers:

• Occupancy % and mix (group vs transient)
• ADR and rate segmentation
• Ancillary spend per occupied room (F&B, spa, parking)
• Group and banquet pickup and utilization

Modeling tips: growth, mix shift, and per‑room revenue drivers

Model ancillary revenue as yield per occupied room (e.g., F&B spend per occupied room) rather than flat growth, to reflect operational leverage. Test mix shifts (higher group vs transient) and capital investments that change spend patterns.

Common calculation mistakes and pitfalls

Inconsistent definitions across stakeholders

Ensure stakeholders agree on what “total revenue” includes. Management, owner, lender and broker reports often vary—document the definition.

Double counting or omitting revenue streams

Watch for internal transfers (F&B posted to rooms or vice versa) and third‑party outlets where revenue doesn’t hit the hotel P&L. Reconcile outlet exports to avoid double counting.

Incorrect denominator (rooms available vs rooms occupied) and period mismatches

Denominator must be rooms available (room‑days), not rooms occupied. Also align revenue period and room‑days exactly (e.g., monthly revenue with monthly room‑days).

Failing to normalize for non‑recurring events or capital projects

Adjust for large one‑off events, major renovations, or owner contributions that distort recurring operating performance before benchmarking.

How to present TRevPAR in reports and dashboards

Best practice visualizations (trend lines, revenue mix bars, per‑room comparisons)

Common visuals: time‑series TRevPAR trend, stacked bars showing revenue mix per room (rooms vs F&B vs other), and per‑available‑room comparisons across properties. Include rolling 12‑month and same‑period prior year lines for seasonality context.

Narrative context to include (mix changes, group impacts, margin caveats)

Always annotate dashboards with explanations for mix changes, major group pickups, promotions, or margin impacts—TRevPAR alone does not show profitability.

KPI pack for investors: what to show on one page

Investor one‑pager: TRevPAR (current & prior year), RevPAR, ADR, occupancy, GOPPAR, NOI, revenue mix %, and short commentary on drivers and one‑line forecast sensitivity.

Quick checklist & calculation template

Data items to collect from P&L/PMS/POS

• Rooms revenue, F&B, Banquets, Spa, Parking, Retail, Other operating revenue
• PMS daily postings and outlet POS exports
• Rooms available (room‑days), closures
• Details of non‑operating items to exclude

One‑line Excel formula and example cell layout

Cell A1: TotalOperatingRevenue
Cell A2: RoomDaysAvailable
Cell A3: =A1/A2  (TRevPAR)

Audit checklist to ensure comparability

• Confirm revenue mapping and exclude non‑operating items
• Reconcile PMS/POS monthly totals to P&L
• Document assumptions for partial periods or adjustments
• Keep versioned workbook with notes for stakeholder review

FAQs (answers to the most common questions)

What exactly is the formula for TRevPAR?

TRevPAR = Total operating revenue for the period ÷ Total room‑days available in the same period.

Should franchise/management fees be included in total revenue?

Include them only if they are recorded as operating revenue on the hotel P&L. If the fees are owner expenses or passthroughs, exclude them to keep TRevPAR focused on property operating revenue.

How do I annualize TRevPAR for a partial year?

Use actual room‑days available for the partial period and annualize only after normalizing for ramp‑up and one‑off events. Prefer a rolling 12‑month TRevPAR for seasonality instead of simple pro‑rations.

Where can I find market benchmark TRevPAR figures?

Benchmarks come from STR, CBRE, PKF, and local market comp reports. Use STR comp sets where available and validate with local broker or owner data.

How does high non‑room revenue change interpretation?

High non‑room revenue (F&B, events) raises TRevPAR but may lower operating margins if those outlets are lower margin or third‑party operated. Pair TRevPAR with GOPPAR and NOI to assess real value.

Is TRevPAR useful for short‑term rentals or mixed‑use assets?

TRevPAR conceptually applies if you can define “available units” and aggregate relevant revenue. For mixed‑use assets, separate hospitality revenue and normalize denominators to ensure comparability.

Real World Application

Scenario: boutique urban hotel with mixed revenue streams (brief setup)

50‑room boutique urban hotel, heavy F&B focus and events, reporting monthly results.

Step‑by‑step calculation from a sample P&L (numbers and formula)

Sample monthly P&L (operating revenue lines): Rooms $75,000; Restaurant/Bar $15,000; Events/Banquets $5,000; Retail & Tours $3,000. Total operating revenue = $98,000.

Room‑days available = 50 rooms × 30 days = 1,500.

TRevPAR = $98,000 ÷ 1,500 = $65.33 (per available room per day) → Monthly TRevPAR expressed as per room: $65.33 × 30 = $1,959.90 per room per month (same as $98,000 ÷ 50).

Interpretation: what the result reveals about operations and valuation

TRevPAR shows the property generates ~$65.33 per room‑day including strong F&B and events. If peers with similar ADR/occupancy show lower TRevPAR, this hotel captures more ancillary spend—positive for valuation. But confirm margins: if F&B is low margin, higher TRevPAR may not translate to proportionate NOI uplift.

Investor/GM decisions prompted by the TRevPAR result (pricing, F&B strategy, capex)

• Investor: consider premium valuation multiple if ancillary revenue is sustainable and high margin.
• GM: test F&B yield initiatives (up‑sell, packages) and optimize banquet pricing.
• Capex: prioritize upgrades that increase spend per occupied room (bar/restaurant redesign, event space tech).

Conclusion and next steps

Key takeaways and one‑sentence definition to remember

One‑sentence: TRevPAR (Total Revenue per Available Room) = all operating revenue ÷ rooms available, and it shows how well a property monetize each room beyond just room sales.

Where to go for data, templates, and further learning

Use STR, CBRE and PKF market reports for benchmarks; extract revenue detail from your PMS/POS/ERP; and implement the simple Excel template above. For deeper analysis, pair TRevPAR with GOPPAR and NOI.

References and further reading

Industry data sources and key publications

• STR market reports
• CBRE hospitality research
• PKF hospitality reports
• Local STR comp sets and brokerage market briefs

Suggested tools and templates (PMS/POS exports, Excel models, dashboard tips)

• PMS/POS nightly export + revenue mapping workbook
• Simple Excel model: revenue bucket tab, room‑days tab, TRevPAR calculation cell (as shown)
• Dashboard: TRevPAR trend, revenue mix stacked bars, GOPPAR and NOI comparisons