Occupancy rate

Occupancy rate is the percentage of available rooms sold during a period. Divide rooms sold by rooms available, then multiply by 100. If 40 of 50 available rooms are sold, occupancy is 80%.

Occupancy does not show the rate achieved. A fuller review also needs room revenue and the context of rooms that were not available for sale.

Average daily rate (ADR)

ADR is the average room revenue earned for each room sold. Divide room revenue by rooms sold. If room revenue is NGN 4,000,000 from 40 rooms sold, ADR is NGN 100,000.

ADR should be interpreted with occupancy. A higher ADR can coincide with fewer rooms sold, while a lower ADR can accompany stronger occupancy.

Revenue per available room (RevPAR)

RevPAR spreads room revenue across all available rooms. Divide room revenue by rooms available, or multiply ADR by occupancy expressed as a decimal. In the example above, RevPAR is NGN 80,000.

RevPAR combines rate and occupancy, but it does not replace broader sales, cost, receivable or profit analysis. SAFHA provides operational room and financial reports that help management review the surrounding context.

Practical review checklist

  • Use a consistent definition of available rooms
  • Separate room revenue from other hotel revenue
  • Compare occupancy and ADR together
  • Use RevPAR for room-revenue productivity
  • Trace unusual movements back to reservations and room records

Frequently asked questions

How do you calculate hotel occupancy?

Divide rooms sold by rooms available for the period and multiply the result by 100.

What is the difference between ADR and RevPAR?

ADR measures average room revenue per room sold. RevPAR measures room revenue per room available, so it reflects both rate and occupancy.