RevPAR (Revenue Per Available Room) is rooms revenue divided by the total room nights available in the period, whether they were sold or not. It is mathematically equal to occupancy × ADR.
It is the headline KPI for most revenue managers because it cannot be gamed from one side: pushing rate is pointless if occupancy collapses, and filling the house at distressed rates does not lift it either. It measures how well you monetise the whole inventory.
Example: 100 rooms over a 30-day month is 3,000 available room nights. With $270,000 of rooms revenue, RevPAR is $90.
In practice: when RevPAR drops, split the variance first. Is it occupancy (fewer room nights) or ADR (lower rate)? The answer points to completely different actions, and benchmarking both against your comp set tells you whether it is your hotel or the market.
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