If you track only three metrics, make them RevPAR, ADR, and occupancy. They are the foundation of pricing decisions—including dynamic pricing (adjusting rates as demand changes).
Quick tool
Calculate RevPAR, ADR, and occupancy in under a minute with our RevPAR calculator.
1) ADR (Average Daily Rate)
ADR tells you the average rate you sold rooms for.
ADR = Room Revenue / Rooms Sold
Definition: ADR.
ADR is useful, but it can mislead if you ignore occupancy: you can raise ADR and still lose revenue if occupancy drops too much.
2) Occupancy Rate
Occupancy shows the share of available rooms you sold.
Occupancy % = Rooms Sold / Rooms Available
Definition: Occupancy Rate.
High occupancy doesn't automatically mean high revenue. If you're full at a low rate, your RevPAR can still lag behind.
3) RevPAR (Revenue per Available Room)
RevPAR combines price and occupancy. That's why it's often the most useful starting point.
4) How dynamic pricing affects these metrics
Dynamic pricing isn't the goal by itself. It's a method to improve RevPAR by making controlled changes to ADR without breaking occupancy.
- On strong demand: raise ADR gradually to maximise revenue without shutting out the market too early.
- On weak demand: look for smart stimuli (value, channels, packages) instead of aggressively cutting every rate.
- With volatile pickup: move earlier and smoother instead of making a sharp last-minute change.
Practical tip: when you test a rate change, track not only ADR but also net pickup and RevPAR for the specific dates.
5) A minimal weekly checklist
- RevPAR, ADR, occupancy: weekly (and by day of week).
- Pickup: twice per week for 14/30/90 days.
- Top 10 strong dates and top 10 weak dates: your action list.
If you want faster control, Sigma Revenue surfaces the key signals and puts them in context for your strategy.