TRevPAR Calculator – Total Revenue Per Available Room

TRevPAR

If you’re a hotel owner, you’ll naturally want to understand some key metrics that are indispensable for your business. One of these metrics, that will undoubtedly help you evaluate your hotel’s performance better, is known as TRevPAR. What does it stand for? The full form works out to total revenue per available room. Hence, this measures the entire revenues you generate from the whole property, based on the number of available rooms. Let’s learn more about the metric below.

Calculating TRevPAR- What’s the Formula to Use?

You should note that TRevPAR is not like RevPAR or ADR, which only concentrate on the room sales. This metric includes all the revenue sources of your property, namely the rooms, ancillary services, spa, retail, tours, food and beverages, etc. This makes it a great measure of your overall property performance.

How can you calculate TRevPAR? Here’s the formula that you can use in this regard:

Total Revenue/Total Available Rooms

So, let’s assume that your total revenue from all departments is $100,000 over a period of 30 days and you also have a total inventory of 100 rooms. Then, you can divide the revenue by your available room nights, which means 30*100 = 3,000. Hence, the TRevPAR comes to $30. What does it mean? On average, every room in your property is generating at least $30 in revenues every single day, even when it is not sold.

Why TRevPAR Matters For You

TRevPAR is an important metric for your hospitality business due to the following reasons:

• If you are a full-service resort or hotel (where your non-room revenue is critical), then you’ll need this calculation without a doubt.
• When you know how much each single room is contributing to your total income, you can understand how productive your inventory actually is, and make better decisions to grow revenues.
• Only RevPAR or ADR may give you incomplete insights in terms of performance if you’re already generating high revenues from your non-room offerings.
• TRevPAR includes everything from your rooms and restaurants to bars, spas, retail outlets, activities, tours and more. This shows your property’s actual earning abilities and you can identify revenue leaks, identify high-performing departments and find new opportunities for cross/up-selling.
• When you see how each single part of the guest experience contributes to your property’s success, you automatically improve your strategic decision making.

How Can You Increase Your Hotel’s TRevPAR?

Wondering how to scale up your hotel’s TRevPAR? Here are some key insights in this regard.

• Include add-ons in the hotel booking engine- Once you allow your guests to customize their stays while booking directly (through choosing and paying for add-ons and upgraded room features), it naturally increases your TRevPAR. Your booking engine should have these selectable add-ons like early check-ins, late check-outs, champagne bottles, snack baskets, etc.
• Build appealing holiday packages- Half the job done is when you build attractive holiday packages that guests cannot resist, i.e. honeymoon or romance offerings, spa stays or wellness retreat offers, etc. These will increase your TRevPAR, since you’re basically bundling the accommodation with amenities or activities either on your own or through partnerships with local businesses. Always have a transparent package total rate and the breakdown of prices, showing discounts on service, rooms, or both. It’s all about giving that extra bit of value to customers and your TRevPAR will shoot up automatically!
• Utilize your hotel’s unused areas- Take the initiative to convert your unused hotel spaces into bookable services or zones for guests. For example, you can cater to people looking for a mix of business and leisure by setting up co-working rooms in unused spaces. Host events for corporates, team-building sessions and weddings in the hotel. Sell every inch of space you can!
• Up-selling at the pre-arrival stage with digital guest service menus- Even if your guests don’t opt for add-ons while booking, you can still create digital guest service menus. They will offer room upgrades and extra amenities. This will help you grow your ancillary revenue streams and also your TRevPAR in turn.