Revfor Essay

RevPAR and ARR is an important tool given to the hotel industry to measure its performance given to its guests as their main aim is to earn profit from the guest. RevPAR and ARR are given importance in the hotels because they are considered as a current ongoing trend to know the profit and lose which the particular hotel chains have gained. Apart from this two important tools hotel also use other tools like GoPAR, occupancy percentage. So in the later on stages I will be discussing on the definitions, advantages and disadvantages of ARR and RevPAR.

RevPAR is a process of comparing the room revenue from the hotel to hotel (Ismail, 2002). RevPAR - is fixed by distributing room revenue expected for a particular period by the total of accommodations

Rev-par allows the hotel on factoring any size in a specific market mix to compare itself with another tool. It uses both occupancy and rate information in its sum (Ismail, 2002). For instance- to calculate Rev-par: Think that Hotel Johns has 140 rooms and a rack rate of Rs.6246.88 as 70 rooms were sold on different rates with 80 rooms occupied by the guest so the occupancy percentage is 57.1%. The room revenue generated was Rs. 473248.82. So the RevPAR will be actual room revenue divide by number of available room i.e. 473248.82/140 =

Kasavana and Brooks (1998) say, ARR is used to determine the achievements factors must equal room revenue divided by room occupied, not room sold. But ARR is used to know the average price of each room sold per day only (Hospitality Yield Management, 2013). ARR which stands for Average Room Rate or also known as ADR Average Daily Rate. Kasavana and Brooks (1998) say that today revenue managers calculate this through an individual guest to groups and convections, from weekdays to