REVENUE MANAGEMENT FORMULAS
OF EXAMS NEWLY UPDATED
1. DR (Average Daily Rate)
CORRECT ANSWER:
ADR = Total Room Revenue ÷ Total Rooms Sold
Rationale:
ADR measures the average price paid for each occupied room. It helps revenue managers
evaluate pricing performance.
2. Occupancy %
CORRECT ANSWER:
Occupancy % = Total Rooms Sold ÷ Total Rooms Available for Sale
Rationale:
Occupancy shows the percentage of available rooms that were sold during a specific period.
3. RevPAR (Revenue Per Available Room)
CORRECT ANSWER:
RevPAR = ADR × Occupancy %
OR
RevPAR = Total Revenue ÷ Total Rooms Available for Sale
Rationale:
RevPAR combines room rate and occupancy to measure how effectively a hotel generates room
revenue from its available inventory.
4. RevPOR (Revenue Per Occupied Room)
CORRECT ANSWER:
RevPOR = Total Revenue ÷ Total Occupied Rooms
, Rationale:
RevPOR measures the total revenue generated from each occupied room, including room and
non-room revenue.
5. GOPPAR (Gross Operating Profit Per Available Room)
CORRECT ANSWER:
GOPPAR = (Total Revenue − Management Controllable Expenses) ÷ Total Rooms Available for
Sale
Rationale:
GOPPAR measures profitability by considering both revenue and controllable operating
expenses.
6. RevPASH (Revenue Per Available Seat Hour)
CORRECT ANSWER:
RevPASH = Total Period Revenue ÷ (# of Available Seats × Hours of Seat Availability)
Rationale:
Used mainly in restaurants to evaluate how efficiently seating capacity generates revenue.
7. Net Room Rate
CORRECT ANSWER:
Net Room Rate = Standard ADR − Distribution Channel Costs
Rationale:
Shows the actual revenue retained after paying commissions and fees to intermediaries.
8. Net ADR Yield
CORRECT ANSWER:
Net ADR Yield = Net Room Rate ÷ Standard ADR
Rationale:
Measures the percentage of ADR retained after distribution expenses.
OF EXAMS NEWLY UPDATED
1. DR (Average Daily Rate)
CORRECT ANSWER:
ADR = Total Room Revenue ÷ Total Rooms Sold
Rationale:
ADR measures the average price paid for each occupied room. It helps revenue managers
evaluate pricing performance.
2. Occupancy %
CORRECT ANSWER:
Occupancy % = Total Rooms Sold ÷ Total Rooms Available for Sale
Rationale:
Occupancy shows the percentage of available rooms that were sold during a specific period.
3. RevPAR (Revenue Per Available Room)
CORRECT ANSWER:
RevPAR = ADR × Occupancy %
OR
RevPAR = Total Revenue ÷ Total Rooms Available for Sale
Rationale:
RevPAR combines room rate and occupancy to measure how effectively a hotel generates room
revenue from its available inventory.
4. RevPOR (Revenue Per Occupied Room)
CORRECT ANSWER:
RevPOR = Total Revenue ÷ Total Occupied Rooms
, Rationale:
RevPOR measures the total revenue generated from each occupied room, including room and
non-room revenue.
5. GOPPAR (Gross Operating Profit Per Available Room)
CORRECT ANSWER:
GOPPAR = (Total Revenue − Management Controllable Expenses) ÷ Total Rooms Available for
Sale
Rationale:
GOPPAR measures profitability by considering both revenue and controllable operating
expenses.
6. RevPASH (Revenue Per Available Seat Hour)
CORRECT ANSWER:
RevPASH = Total Period Revenue ÷ (# of Available Seats × Hours of Seat Availability)
Rationale:
Used mainly in restaurants to evaluate how efficiently seating capacity generates revenue.
7. Net Room Rate
CORRECT ANSWER:
Net Room Rate = Standard ADR − Distribution Channel Costs
Rationale:
Shows the actual revenue retained after paying commissions and fees to intermediaries.
8. Net ADR Yield
CORRECT ANSWER:
Net ADR Yield = Net Room Rate ÷ Standard ADR
Rationale:
Measures the percentage of ADR retained after distribution expenses.
