What Is RevPAR in Short-Term Rentals?

Summary

What is RevPAR?

RevPAR (Revenue Per Available Rental) measures how much revenue your property generates for each night it could potentially be booked. It is calculated either by Total Revenue ÷ Available Nights or Average Daily Rate (ADR) × Occupancy Rate.

Why it matters

RevPAR shows you exactly how well your property is performing financially by combining both pricing and occupancy into a single metric. When your RevPAR increases, it means your pricing and booking strategies are working together effectively to maximize your earnings.

Who should know it

Hosts and property managers who want to make data-driven decisions about their rental business. RevPAR is particularly valuable for anyone tracking and improving their property’s performance. 

Where you’ll see it

You'll find RevPAR throughout AirDNA's tools as a key performance metric. It's prominently featured in your Performance Dashboard, where you can track your property's RevPAR against market averages. You'll also see it highlighted in our Monthly Market Reviews and Best Places to Invest Report.

RevPAR Overview

RevPAR is a key metric for understanding how well your short-term rental property is performing financially. The term comes from the hotel industry, which means “Revenue Per Available Room,” but AirDNA adapts it to “Revenue Per Available Rental” to reflect how entire homes or units are rented rather than individual rooms.

You’ll find RevPAR metrics featured prominently in AirDNA’s monthly market reviews and inside your property’s performance dashboard.

Check out our full guide on how to use RevPAR to improve rental pricing and maximize returns.

Why Is RevPAR Important in Short-Term Rentals?

RevPAR is important in helping you manage and grow your short-term rental business. Here’s why it matters:

Diagnose performance

RevPAR helps property managers and investors see if their occupancy rates and average daily rates (ADR) are working together to maximize revenue. When RevPAR is lower than expected (compared to your overall market or similar properties), it helps you pinpoint exactly what's wrong. You may be getting bookings but charging too little (high occupancy, low ADR) or charging premium rates but sitting empty too often (low occupancy, high ADR). This clarity helps you focus your improvement efforts on the right areas, from improving your listing's appeal to adjusting your overall pricing strategy.

Informs pricing strategies

RevPAR data helps you make tactical pricing moves to maximize revenue throughout the year. For example, if your property is fully booked on weekends but weekdays are slow, you could lower weekday rates to attract guests while keeping weekend rates higher. This dynamic pricing approach helps you capture revenue opportunities across different demand periods. Learn more about AirDNA's rate recommendations.

Benchmarking

Compares your property’s performance with similar rentals in your area.
For example, if the average RevPAR in your area is $120 and yours is $100, it may indicate a need to adjust pricing or improve your listing to stay competitive. Find out how benchmarking boosts efficiency and revenue for short-term rentals.

Market trends

Tracks seasonal and market-wide shifts in demand, helping you stay competitive. By monitoring RevPAR trends, you can anticipate peak seasons, adjust for local events, and optimize your pricing strategy throughout the year. This insight helps you make proactive decisions about when to raise rates, when to offer promotions, and how to maximize revenue across different seasons.

How to Calculate RevPAR

You can calculate RevPAR for short-term rentals using these simple formulas:

Formula 1: Total Revenue ÷ Available Nights

This formula calculates your revenue per available night, excluding unbookable days like maintenance or owner stays.

How to calculate:

1. Determine your total revenue: Add up all the income generated from bookings.
2. Count the available nights: These are the days your property was available for booking, excluding maintenance or personal use days.
3. Divide total revenue by available nights: The result is your RevPAR.

For example, if your total revenue is $6,000 and you have 30 available nights, your calculations would be: $6,000 ÷ 30 = $200 RevPAR

Formula 2: ADR × Occupancy Rate = RevPAR

This alternative formula gives the same result by considering how often your property is booked at its average daily rate (ADR).

How to calculate:

1. Identify your ADR: This is the average amount you earn per booked night.
2. Identify your occupancy rate: This is the percentage of available nights your property is booked.
3. Multiply ADR by occupancy rate: The answer to this multiplication is your RevPAR.

For example, If your ADR is $120 and your occupancy rate is 75%, your calculation would be: $120 × 75% = $90 RevPAR

Inside AirDNA, you'll find even more ways to analyze RevPAR:

• Daily RevPAR: Total daily revenue divided by the total number of available listings.
• Monthly RevPAR: Total monthly revenue divided by the total number of listing nights available in that month.
• Annual RevPAR: Average daily revenue per listing over a 12-month period, including cleaning fees.
• RevPAR % change: Percent change of RevPAR in a selected period compared to the same period the previous year.

These insights help property managers monitor individual property performance while guiding investors on market trends, demand, and seasonality.

What Is a Good RevPAR?

What’s considered “good” RevPAR depends on your location, property type, and current market conditions.

For example, a beachfront rental might see $150 RevPAR in winter as acceptable but aim for $250 in summer, while a rural property may consider $80 good year-round.

To understand what’s good for your rental:

• Compare your RevPAR to similar properties in your area.
• Analyze seasonal trends and demand fluctuations in your market.
• Assess your revenue goals. Higher RevPAR might justify higher rates with fewer bookings, while lower RevPAR could reflect steady occupancy.
• Track year-over-year trends to spot improvements or inefficiencies.

Things to Consider When Using RevPAR

Below are some important factors to keep in mind when using RevPAR:

• Operational costs: RevPAR only reflects revenue, not expenses like maintenance or utilities. A high RevPAR doesn’t always mean profitability.
• Property size: Smaller properties might have a higher RevPAR but lower total revenue compared to larger rentals.
• Market dynamics: Seasonal demand, local events, and market trends can cause significant fluctuations in RevPAR.
• Benchmarking challenges: It can be tough to compare your property’s RevPAR with competitors if local data isn’t readily available (but you’ll have all the data you need with AirDNA).

RevPAR is a valuable metric, but it works best when paired with a broader understanding of hosting strategies. If you're just getting started, take a look at our beginner’s guide to Airbnb hosting.