What is more important adr or revpar and why

Question

Accepted Answer

Both ADR and RevPAR are important, but ADR is more crucial as it directly impacts revenue generation.

ADR (Average Daily Rate) is the average price at which rooms are sold, directly impacting revenue.
RevPAR (Revenue per Available Room) is calculated by multiplying ADR with occupancy rate.
While RevPAR considers both ADR and occupancy, ADR focuses solely on the room rate.
ADR is crucial for maximizing revenue, as even with high occupancy, low ADR can result in lower overall revenue.
For example, if a hotel has high occupancy but low ADR, it may not generate enough revenue to cover expenses.
However, if ADR is high, it can compensate for lower occupancy and still generate significant revenue.
Therefore, ADR is more important as it directly affects revenue generation.

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