By the Unity Stays directors, Marcus Chong & Gadir Al-Khatib · Last updated 12 August 2026
In short: ADR is revenue per night sold, occupancy is nights sold divided by nights available, and RevPAR — ADR multiplied by occupancy — is the one to watch, because the other two trade against each other and high occupancy often signals underpricing. None measures profit, so track average stay length too: cleaning is charged per changeover, not per night.
The three definitions
ADR — average daily rate. Total room revenue divided by the number of nights actually sold. What you earned per occupied night.
Occupancy. Nights sold divided by nights available. Usually expressed as a percentage.
RevPAR — revenue per available room. Total room revenue divided by nights available, occupied or not. Equivalently, ADR multiplied by occupancy.
The distinction between the last two is the whole point: occupancy ignores what you charged, and ADR ignores how often you sold.
Why RevPAR is the one to watch
Because ADR and occupancy trade against each other, and either can be improved by damaging the other.
Drop your price and occupancy rises while ADR falls. Raise it and the reverse. Both moves look like a win if you are watching only one number, which is why owners cite occupancy and operators cite RevPAR.
A property at 95% occupancy can earn less than the same property at 75% priced properly — and it will cost more to run, because it turned over more times and paid for more changeovers. High occupancy is frequently a symptom of underpricing.
The costs the three numbers hide
None of these metrics is a profit measure, and treating RevPAR as one is the next mistake along.
RevPAR says nothing about the cost of servicing the nights it counts. Two properties with identical RevPAR earn very differently if one runs three-night stays and the other runs month-long ones, because cleaning is a per-changeover cost.
That is why average length of stay belongs alongside them. Nights let divided by average stay gives changeovers, and changeovers times the changeover cost is usually the largest line after the management fee. Our income calculator works this way deliberately.
Comparing properly
Compare RevPAR against the same property's previous year, not against another property. Different properties in different places with different cost bases are not comparable on a single figure.
Compare like periods. A quarter against the same quarter last year tells you something; a quarter against the previous quarter tells you it is winter.
And be careful with published market figures. Anything derived from scraped listing data has known biases — it tends to overweight active, well-managed listings and to confuse blocked calendars with sold nights. Our income guide explains why we will not quote such figures for a specific property.
What to ask a manager for
Monthly, per property, and it should not require a request: gross booking revenue, nights available, nights sold, ADR, RevPAR, average length of stay, changeovers, and every deduction itemised.
That is enough to reconstruct the arithmetic yourself and to spot a trend before it becomes a year. A statement showing one net figure lets you check nothing.
Our statement guide covers what a proper one contains and how to reconcile it in about twenty minutes a quarter.