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Dear All,


Which is more precise ? Can anyone elaborate more in above captioned to justify overall peformance in rooms and hotel..?


Anyone can help me to  calculate if the property value 38 millions, 198 rooms, 4 star , what is the rack rate should we calculate average small size of room from 22 square meter to 48 square to calculate per room cost the according 38M, 198 rooms property...?


Would gratefull that any one can help me and need professional advice on this   

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Mr. Shaw,

Rev par is the most effective tool for every property to evalute the ADR & ARR WILL not give u an appropriate idea.

Dear Mr. Lawrence,
As per my experience and knowledge, RevPAR is the most effective tool to understand what have we acheived exactly out of the total rooms. To calculate the room cost, you need to know your expenditures on the room, viz- amenities, supplies, energy cost, etc.
Mohd. Ashique
Consider also the REVPAR Index ( RGI ), I mean your indication within your competitors set, as each hotel has different size ( No. of rooms).
hey guys, can any one send me the rev par, i want to have an idea of it, will be really thankful
my email is
hI Saheem,
I did not understand wht r u looking for because
RevPAR means : the revenue (rooms) collected out of total rooms available
formula is : Rooms revenue div by per available room
any thing else,,,,, mail me on
What Percentage of GOP (Gross Operational Profit) are you looking for? Secondly, what are the industry trends, industry segments, feeder markets and competitors strength in particular at your region.

you may write to me at &
Dear Mr Lawrence,

Many steps are required to adequately calculate first the rate than the cost of your room. You need to know perfectly your competition in primary and secondary market, make a a benchmark study and perform thoroughly a Room Night Analysis. Once your RNA is finished you will know what is going to be your projected ARR. Now it's all up to you to keep your hotel operating with 50% GOP approx. You can project all that on a 12 year financial projections plan afterwise. Than you will be able to establish in advance a budget and cost per room. Projected ARR and REVPAR if ever it makes you feel happy to know those factors. Important thing for all this location, local taxes, labour laws, distance from airport, distance from closest URBAN CENTRES.

ARR, ADR and REVPAR are great calculations to monitor market trends (ARR, ADR) and monitor if you are going to do your 50% GOP (REVPAR). They are daily indicators but what the owner's really want is CFFO (Cash Flow From Operations): The bottom line, howfast they will get the inversion back and start to make real profit as more CFFO the higher gets the real estate asset value, which is the long term goal and aim.

Square meters of rooms as per your concern doesn't really is of your incumbent here. as you expressed concern about ARR and REVPAR. If your cost per SQM are used for construction budgeting only and space procurements analisys which are required at the planning stage only.

Shall yo u need any consulting for a specific project let me know:


ADR is just the to make you happy that one can sell the room hypothetically at xyz high yield, but name of the game is how to achieve REVPAR if you focus on REVPAR then things are under your control in terms of all key performance indicators.

botton line is to only strive for REVPAR and try to increase the volume or if one things that volume is challenging then keep your ADR high enought to match the maximum REVPAR.......good luck
Total number of Rooms that are available to sell : 200
Occupancy %: 80%

Lets assume that Hotel A earns from selling rooms US$ 5,840,000/-
Lets assume that Hotel B earns from selling rooms US$ 6,716,000/-

Hotel A will not look so good when its management company/owner/financial institute compares its RevPAR to its competitor, Hotel B, because it will lose revenue for each of the room’s everyday for 365 days. Here we will calculate the REVPAR and then answer WHY?

REVPAR for Hotel A = US$ 100/- per night per room (5,840,000 / 365 days / 160 rooms). Rooms are taken as 160 as the hotel does 80% occupancy. Therefore 200* 80% = 160 rooms.

REVPAR for Hotel B = US$ 115/- per night per room (6,716,000 / 365 days / 160 rooms). Rooms are taken as 160 as the hotel does 80% occupancy. Therefore 200* 80% = 160 rooms

Mr Vijay

Thanks for your clarification pertaining to what you have transpired earlier, but what me confused about your calculation:-

Lets assume that Hotel A earns from selling rooms US$ 5,840,000/-
Lets assume that Hotel B earns from selling rooms US$ 6,716,000/-

It should: US5840000/ 365 days / 200 rooms
Available room for sell should be 200, 80%=160 rooms if calculated base on OCC day/mth/yr should back to calculation of ADR/ARR right..?

REVPAR: Total earning from room divide total available sellable=200 rooms instead of divide total accupied room for the day for instance 80%=160 rooms right...?

Sorry need your advice on this again to clear my confusion


Mr Vijay,


Thanks & Regards

Dear Lawrence,
Your question is quite confusing.

Firstly, you need to tell us whether the hotel is an old property or a pre-opening or newly opened. The valuation of the property is not a bench mark to calculate your rates. You need to understand the market scenario and at this given point of time what is the best / highest rate (looking at your competetive set of hotel) you can demand from the market based on your hotel category. Your rate theory will assist you to make profit and start giving returns on investments for the owners

In general, according to my past experience a hotel which has had a steady REVPAR has always been profitable.

In recent times Rack rates are used only to calculate your discout percentage. Which is of course unfortunate.

My advise for you would be to immeidiately get hold of your hotel budget for the financial year and work out your break even analysis. Once you have that in place you will have a clear picture on your financials, which will help you move forward and take decisions. Incase you require the formula to work out your break even analysis, please do let me know.
Ms Moumita

Thanks for your advice, any formula or calculation of "break even analysis" of properties for me to analyse basement on my captioned requirement....

Thanks & Regards



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